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Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2012

Valley Metro Regional Public Transportation Authority Phoenix, Arizona

Board of Directors Chair, Vice Mayor Ron Aames, Peoria Vice Chair, Vice Mayor Scott Somers, Mesa Treasurer, Councilmember Trinity Donovan, Chandler Councilmember Jim McDonald, Avondale Councilmember Eric Orsborn, Buckeye Mayor Lana Mook, El Mirage Vice Mayor Jenn Daniels, Gilbert Mayor Elaine Scruggs, Glendale Councilmember Joe Pizzillo, Goodyear Supervisor Mary Rose Wilcox, Maricopa County Mayor Greg Stanton, Phoenix Vice Mayor Bob Littlefield, Scottsdale Mayor Sharon Wolcott, Surprise Councilmember Shana Ellis, Tempe Vice Mayor Kathie Farr, Tolleson Councilmember Rui Pereira, Wickenburg Staff Leadership Team Stephen R. Banta, Chief Executive Officer Raymond Abraham, Chief Operations Officer Hillary Foose, Director Communications & Marketing Wulf Grote, Director Planning and Development Carol Ketcherside, Director Admin & Organizational Development John McCormack, Chief Financial Officer Jyme Sue McLaren, Chief of Staff Gardner Tabon, Chief, Safety and Security Prepared By Finance Department Staff

Valley Metro Regional Public Transportation Authority

Organization Chart

Citizens of Maricopa County

Board of Directors

Chief Executive Office

Communication & Marketing

Planning & Development

Design & Construction

Operations & Maintenance Finance

Admin & Organizational Development

Valley Metro Regional Public Transportation Authority Table of Contents Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2012

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Introductory Section

Letter of Transmittal iii GFOA Certificate of Achievement xi

Financial Section Independent Auditors’ Report 1 . Management’s Discussion and Analysis (required supplementary information) 3 . Basic Financial Statements: .

Government-wide Financial Statements: Statement of Net Assets 14 Statement of Activities 15

. Fund Financial Statements:

Balance Sheet – Governmental Funds 17 Statement of Revenues, Expenditures and Changes in Fund Balances –

Governmental Funds 18 Reconciliation of the Statement of Revenues, Expenditures and Changes in

Fund Balances of Governmental Funds to the Statement of Activities 19 Statement of Revenues, Expenditures and Changes in Fund Balance –

Budget to Actual – General Fund 20 Statement of Revenues, Expenditures and Changes in Fund Balance – Budget to Actual – Transit Planning Fund 21 Statement of Revenues, Expenditures and Changes in Fund Balance – Budget to Actual – Transportation Demand Management Fund 22 Statement of Net Assets – Proprietary Funds 23 Statement of Revenues, Expenses and Changes in Fund Net Assets –

Proprietary Funds 24 Statement of Cash Flows – Proprietary Funds 25

Notes to the Financial Statements 27

Other Supplementary Information – Combining and Individual Fund Financial

Statements and Schedules: Schedule of Revenues, Expenses and Changes in Net Assets – Budget to

Actual – Proprietary Funds: Enterprise Funds: Transit Service Operations Fund 50 Valley Metro Rail Fund 51

Valley Metro Regional Public Transportation Authority Table of Contents (Continued) Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2012

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Statistical Section

Statistical Section Contents 53 Financial Trends

Net Assets by Component 54 Changes in Net Assets 56 Fund Balances of Governmental Funds 60 Changes in Fund Balances of Governmental Funds 62

Revenue Capacity Sales Tax Revenues by Component 64 Maricopa County Transportation Excise Tax Revenue Distributions 66 Maricopa County Transportation Excise Tax Revenue Collections by Category 68 Arizona Transaction Privilege Tax Excise Tax Rates by Category 69

Debt Capacity Transportation Excise Tax Revenue Bonds – Bond Coverage 71 Outstanding Debt by Type 72 Debt Service Revenue and Cost per Capita 73

Demographic and Economic Information Regional Population Statistics 75 Top Ten Employers for Maricopa County 77 Local Transportation Assistance Funds 79 Demographic and Economic Statistics 81

Operating Information Full-time Equivalent Employees by Function/Program 82 Operating Indicators by Program:

Fixed Route System 83 Dial-a-Ride System 85 Shuttle / Circulator System 89

Capital Asset Statistics by Function/Program: Revenue Vehicles for Transit Service Operations 91

Introductory Section The Introductory Section includes the Authority’s transmittal letter and the Certificate of Achievement for Excellence in Financial Reporting.

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December 18, 2012 To Chair and Members of the Valley Metro RPTA Board of Directors:

The comprehensive annual financial report of the Valley Metro Regional Public Transportation Authority (the Authority) for the fiscal year ended June 30, 2012 is hereby submitted as mandated by state statute. The statute requires that the Authority annually issue a report on its financial position and activity, and that this report be audited by an independent firm of certified public accountants. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with management. To the best of our knowledge and belief, the enclosed data are accurate in all material respects and are reported in a manner that presents fairly the financial position and results of operations of the Authority on both a government-wide and fund basis. All disclosures necessary to enable the reader to gain an understanding of the Authority’s activities have been included. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for local governments as prescribed by the Governmental Accounting Standards Board (GASB) and the American Institute of Certified Public Accountants (AICPA). The Authority’s management is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the Authority are protected from loss, theft or misuse and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with GAAP. The Authority’s internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. The independent certified public accounting firm of Heinfeld, Meech & Co., P.C., whose report is included herein, has audited the basic financial statements and related notes. As stated in the independent auditors’ report, the goal of the independent audit was to provide reasonable assurance that the basic financial statements of the Authority for the fiscal year ended June 30, 2012 are free from material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the basic financial statements of the Authority as of and for the fiscal year ended June 30, 2012 are fairly presented, in all material respects, in conformity with GAAP. The independent auditors’ report is presented as the first component of the financial section of this report.

Valley Metro Regional Public Transportation Authority Letter of Transmittal (Continued)

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Management’s Discussion and Analysis (MD&A) immediately follows the independent auditors’ report and provides a narrative introduction, overview and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it. Additionally, the Authority is required to have an independent audit of expenditures of federal awards received (Single Audit) by the Authority directly from federal agencies, or passed through to the Authority by other governmental entities during the fiscal year. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the Authority’s internal controls and compliance with legal requirements having a direct and material impact on major programs, with special emphasis on internal controls and compliance requirements involving the administration of major federal awards. As a subrecipient of federal and state financial assistance, the Authority is responsible for ensuring that an adequate internal control structure is in place to ensure and document compliance with applicable laws and regulations related to these programs. This internal control structure is subject to periodic evaluation by management and by the Authority’s independent audit firm. As part of the Authority’s Single Audit, tests were made of the internal control structure and of its compliance with applicable laws and regulations, including those related to federal awards. Although this testing was not sufficient to support an opinion on the Authority’s internal control system or its compliance with laws and regulations, the audit of the Authority’s compliance with requirements applicable to each major program and internal control over compliance for the year ended June 30, 2012 resulted in an unqualified opinion of compliance and noted no material weaknesses in internal controls or significant violations of applicable laws and regulations with respect to major programs. The auditors’ reports on internal controls and compliance with applicable laws and regulations are included in the single audit section of this report. PROFILE OF THE AUTHORITY The Authority was established in 1985 along with the passage of a one-half of one percent sales tax increase to fund regional highway and public transportation improvements in Maricopa County, Arizona (the County). The Authority was created to develop a regional transit plan and to develop and operate a regional transit system in the County. The financial reporting entity of the Authority includes all its funds and does not include any component units (i.e., legally separate entities for which the Authority is financially accountable). The Authority is governed by a sixteen-member Board of Directors consisting of a member of the County Board of Supervisors and the mayors (or their designees) of the member cities and towns. For fiscal year 2011-12, the members included the cities of Avondale, Chandler, El Mirage, Glendale, Goodyear, Mesa, Peoria, Phoenix, Scottsdale, Surprise, Tempe and Tolleson, and the Towns of Buckeye, Gilbert and Wickenburg. Any municipality in the County may join the Authority and have one elected official serve on the Board of Directors. A Chief Executive Officer, appointed by the Authority’s Board of Directors, is responsible to carry out policy and plan, manage, supervise and coordinate all day-to-day activities. The Authority procures regional bus, dial-a-ride and vanpool services, provides regional transit and capital planning support, coordinates the County’s transportation demand management activities, and provides general operational and administrative support to its members.


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In February 2012, the Boards of Directors of the Authority and Valley Metro Rail, Inc. (METRO) took action to appoint Mr. Stephen R. Banta as the Chief Executive Officer to manage the two financial entities under a single integrated agency. The Authority and METRO entered into an intergovernmental agreement providing for the single CEO to serve both organizations effective March 1, 2012 with the preservation of both RPTA and METRO Boards of Directors The annual budget serves as a foundation for the Authority’s financial planning and control. Activities of the general fund, special revenue funds and enterprise funds are included in the annual appropriated budget. The level of budgetary control (i.e., the level at which expenditures cannot legally exceed appropriations) is the total annual appropriated budget. Costs in excess of the total annual appropriated budget require approval of the Board of Directors. Transfers of appropriations between departments require the approval of the Chief Executive Officer. The Authority maintains budgetary control by conducting quarterly evaluations of expenditures against appropriations and through close monitoring of revenues. As demonstrated by the statements included in the financial section of this report, the Authority continues to meet its responsibility for sound financial management.

FACTORS AFFECTING FINANCIAL CONDITION

Local Economy The Authority serves Maricopa County, which is located in central Arizona. According to the Arizona Department of Commerce, Maricopa County measures 9,222 square miles, 98 square miles of which is water. Twenty-nine percent of this area is owned individually or by corporations, and the U.S. Bureau of Land Management owns 28 percent. The U.S. Forest Service and the State of Arizona each control 11 percent of the County; an additional 16 percent is owned publicly. Almost 5 percent is Indian reservation land. Parts of western Maricopa County have 11 designated Enterprise Zones as well as central and southern areas in the City of Phoenix. The metropolitan area is home to the state capitol and includes the City of Phoenix, population 1.4 million, making it Arizona’s major center of political and economic activity. In fact, more than half of the state’s population resides in Maricopa County, which is home to 15 institutions of higher learning, including Arizona State University; various cultural attractions; professional baseball (Arizona Diamondbacks), basketball (Phoenix Suns and Phoenix Mercury), football (Arizona Cardinals) and hockey (Phoenix Coyotes); and Sky Harbor International Airport one of the top ten busiest airports in the United States with over 1,200 daily flights. The County has grown from just over 2.1 million residents in 1990 to 3.8 million residents in 2010, an increase of 81 percent in just 20 years. According to the Greater Phoenix Economic Council, population is projected to grow 77 percent by 2030, reaching 6.3 million people Maricopa County currently accounts for about 60 percent of the state’s population and attracts a continual inflow of immigrants seeking new opportunities. The total labor force in Maricopa County grew to almost 1.94 million people in 2010, an increase of over 84 percent since 1990. According to the Greater Phoenix Economic Council, Maricopa County has maintained substantial employment growth over the past decade. State transportation planning projections forecast Maricopa County employment to increase by 75 percent, reaching 3.4 million jobs by 2030.


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With the recent economic slowdown, population in Maricopa County decreased by approximately 12%. Despite the recent decrease in population, ridership in public transportation has grown by 22.5% over the last five years. Population is projected to increase and continues to challenge the Authority and the County it serves. Increases in population and fuel prices will continue to lead to increased demands for quality public transportation and improved air quality. With the burgeoning increase in population come concerns about how to manage issues of congestion on the Valley’s roadways. As our region grows, it is important that we maintain a safe transportation system that moves people and goods efficiently, and that attracts high quality workers and businesses to the area. On the positive side, the region has taken two major steps toward improving the transportation system. First, thanks to a November 2004 voter-approved transportation tax initiative (Proposition 400), beginning in January 2006 a revenue stream of over $95 million annually injects much needed resources into the region’s transit network, allowing for the expansion and improvement of the entire system. Second, light rail transit began operating in December 2008, is carrying over 40,000 passengers per day, and has fueled the growth of public transit usage in the Valley.

Major Initiatives On November 2, 2004, the voters of Maricopa County approved Proposition 400, the continuation of the transportation tax, for a 20-year period, beginning in calendar year 2006. The approximate total vote in favor was 57.5 percent. This was a major milestone in transportation funding and service in the region. The Proposition had unanimous support from the Mayors of all of the cities in the region and the Maricopa County Board of Supervisors, the Maricopa Association of Governments Regional Council, the Authority’s Board of Directors and the Arizona Department of Transportation (ADOT). It also had the support of nearly every major business and community agency in the region. To implement the projects approved with the passage of Proposition 400, staff worked with member agencies and other stakeholders to develop the Transit Life Cycle Program (TLCP). This project included the development of three major program elements: guiding principles, financial model and policies and procedures. The original guiding principles and the 20-year financial model were adopted by the Board in June 2005 and then revised and adopted in April 2010. The original policies for the TLCP were adopted by the Board in October 2005 and have been revised and adopted by the Board in January 2011. The six adopted guiding principles of the TLCP are as follows:

1. A defined and consistent process will be established for allocating funding for projects in the Regional Transportation Plan.

2. A defined and consistent process for Plan amendments and changes will be established.

3. Funding allocations will be regularly monitored and managed. 4. A defined and consistent process will be established to ensure legislated compliance

audit, reporting and performance requirements are met. 5. Budgeting and accounting systems will be established to manage Public

Transportation Funds (PTF) and monitor and report results. 6. Jurisdictional equity will be maintained.


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Numerous meetings of the TLCP executive steering committee, TLCP stakeholders committee and TLCP technical working groups were held over a nine-month period in order to complete this project, which was one of the most successful cooperative transit projects this region has ever undertaken.

Long-term Financial Planning With the passage of Proposition 400, a new era began for the Authority. For the 20 year period 2006 thru 2025, a significant stream of regional funds will vitalize public transportation in the region. Valley Metro’s mission is to put those funds to work to effectively and efficiently serve our member agencies and their residents for the next 20 years. The continuing development of Valley Metro’s long term financial plan is integral to the success of public transportation in the region. For the first time in the history of the Authority, financing using the sale of bonds occurred during FY 2009. The Authority’s Board of Directors authorized the issuance of Senior Bonds in an amount not to exceed $135 million. The actual issuance of bonds (net of unamortized costs) was $105 million ($50 million for Bus and $55 million for Rail) on June 30, 2009. The Authority will use the bond proceeds for the payment or reimbursement of costs of capital expenditures in the regional transportation plan, including without limitation: relocation of utilities relating to the light rail system; planning, acquisition, construction and equipping expansions of the light rail system; bus transit centers and bus/rail transit centers; acquisition of buses and paratransit vehicles; acquisition, construction and equipment of park-and-ride facilities; and related capital costs. The Authority will undertake a number of key projects during FY 2013 as the agency continues the implementation of TLCP operating and capital projects. The major projects and studies for FY 2013 include the following:

• Long-Range Planning

Update and/or produce information for the Long-Range Transit Plan for Maricopa County, and annual update to the transit element of the Maricopa Association of Governments’ (MAG) Regional Transportation Plan (RTP). Provide transit data to MAG in updating the regional travel demand model, provide technical support to MAG on commuter rail planning. Participate in public meetings and open house workshops to solicit public review and comment. Provide for support in the development and administration of stakeholder communications, public meetings, and public outreach as required to collect and analyze opinions and input into system, corridor and capital planning programs, the transit lifecycle program, service adjustments, purchases and other agency programs and projects.

• Short Range Planning Annual update for the MAG Annual Transportation Report on Prop 400 and preparation of Annual Transit Performance Report. In addition, coordinate with all transit providers and funders in the MAG area on service and route planning activities including Supergrid, Arterial and Freeway Bus Rapid Transit (BRT), Express Bus routes, and Rural Connector routes. Collect and analyze information from operators and area communities to develop a Short Range Transit Program annual update that details regionally funded transit investments that will occur within the five year horizon of the Plan. Fulfill planning requirements of Title VI of the Civil Rights act as outlined in FTA


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Circular 4702.1A, addressing how service and project related impacts to minority and low income populations will be addressed, as well as the procedures used to address Title VI-related customer complaints.

• Transit Research and Survey Develop, implement, and provide analysis for comprehensive transit research surveys and studies. Information from the surveys will be used to produce a database for transit planning purposes, including route evaluation and service adjustments. Survey information derived from the Origins and Destinations Survey will be used to calibrate the MAG travel model insuring that model outputs provide a more accurate projection of mode split and travel behavior. The inclusion of customer satisfaction questions will assist in monitoring the quality of the services provided on an ongoing basis.

• Operations Planning Provide staff support to Regional Transit Advisory Group (RTAG) on development of recommendations to integrate paratransit operations to improve service to riders and service efficiencies. Provide operations planning assistance to RPTA member agencies upon request.

• Project Management RPTA provides project management in the implementation of the 20-year capital program identified in the RTP. RPTA is the designated lead agency for development of transit capital and operating projects which are identified in the Regional Transportation Plan and funded through the 1/2 cent sales tax extension authorized by Proposition 400. Project management includes design and construction of facilities and associated support infrastructure.

• Regional Marketing Program Transit Book Development and Printing: The Transit Book is the primary route and schedule communications vehicle in conjunction with on-line information for Valley Metro bus riders. It is developed and distributed twice a year. Printed Communications Tools and Signage: Various forms of printed materials are essential for providing transit related information to transit users, non-users, key stakeholders, and partners. This includes brochures, passenger notices, car cards, newsletters, printed guides, kiosk signage, schedules and system maps. Web Site Design and Navigation: The mission of ValleyMetro.org is to provide up-to-date information needed to use Valley Metro’s services, educating the public about what services are available and the benefits of using those services, and promoting alternative modes of transportation in an effort to minimize the impact of single-occupancy vehicle usage in the Valley. With the significant increase in services and information needed to be communicated to the public, ValleyMetro.org requires significant changes to the site design and navigation. Aside from basic Web site navigation features, interactive features such as the Online Trip Planner, the Commuting Cost Calculator and periodic interactive contests will be enhanced for educational purposes and as an incentive to promote the use of alternative modes. ShareTheRide.com is Valley Metro’s tool for carpool and vanpool matching, and is linked to ValleyMetro.org. Information for the Valley METRO Rail is also highlighted. Over time the site design and navigation are essential to delivering a "transit portal" for the entire region encompassing all transit modes.


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Valley Metro Communications Campaign: Valley Metro and our contracted public relations firm, R&R Partners, plan to continue to implement a campaign designed to promote Valley Metro as the transportation solutions provider that makes the Valley a better place to live, work, play, and visit. This includes public relations support, creative design and development, and various forms of media purchase and placement including print, radio and online advertising.

• Regional Transportation Demand Management (TDM) Program The Regional TDM Program promotes and provides ridesharing and alternative transportation modes services to the general public and over 1,200 Valley employers involved in the Trip Reduction Program. Services include a computerized matching system for carpooling, vanpooling, and bicycle partner opportunities; and assistance with implementing a variety of Transportation Demand Management (TDM) programs such as compressed work weeks and telecommuting programs. The TDM Program oversees and manages regional vanpool services. A public awareness program, the Clean Air Campaign, is administered by Valley Metro. This program is a private/public partnership encouraging participation in alternate modes of transportation, alternate work schedules, and other pollution reducing measures. The TDM Program also oversees regional bicycle and pedestrian safety & education programs.

Valley Metro Operations Initiatives

• Valley Metro Operations Valley Metro manages fixed route bus, demand response (Dial-a Ride) and vanpool services in cooperation with Member Cities. During fiscal year 2013 the integration of City of Tempe operated bus service will be procured with a single contractor for greater efficiency of operations and consequential cost savings. Dial-a-Ride services have been traditionally provided by a fleet of specialized van-sized vehicles. Valley Metro has initiated a demand response program which will dispatch vehicles which are tailored to the specific customer need. Many Dial-a-Ride trips will be completed in fuel efficient sedans generating substantial savings.

• Customer Service

The Regional Call Center provides bilingual telephone support for regional transit inquiries including trip planning, addressing customer complaints, lost and found inquiries, and light-rail construction mitigation. With increasing ridership and growing call volumes, staff introduced a self-service automated program called NextRide. Customers may use an interactive voice response system, a mobile phone text messaging application, or internet connection to get the next three arrival times of buses or trains serving a particular location. In the first year of existence, the program has delivered over 3 million NextRide responses to customers.

• Growing Ridership In FY 2012, regional public transportation ridership reached 71 million passengers, growing by 3.4 million riders over last year (5.0%) and 13.0 million riders over the past five years (22.5%).

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Financial Section The Financial Section includes the independent auditors’ report, Management’s Discussion and Analysis (MD&A), the basic financial statements (government-wide statements and fund statements), notes to the financial statements, other Required Supplementary Information (RSI) and other financial schedules.

Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis

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As management of Valley Metro Regional Public Transportation Authority (the Authority), we offer this narrative overview and analysis of the financial activities of the Authority for the fiscal year ended June 30, 2012. This discussion and analysis is designed to (1) assist the reader in focusing on significant financial issues, (2) provide an overview of the Authority’s financial activity, (3) identify changes in the Authority’s financial position, (4) identify any material deviations from the financial plan (adopted annual budget) and (5) identify individual fund issues or concerns. Financial Highlights • The Authority’s total net assets increased $15.0 million in FY 2012, comprised of a

decrease of $5.1 million in governmental activities and an increase of $20.1 million in business-type activities. Total net assets of the Authority are $105.6 million, of which $97.5 million is unrestricted.

• The governmental activities revenues increased by approximately $16.4 million (14.9%)

over the previous year. • The business-type activities revenues increased by approximately $23.8 million (68.8%)

from the previous year. • At June 30, 2012, the Authority’s governmental fund balance sheet reported a combined

ending fund balance of $47.4 million, a decrease of $5.0 million (9.5%) compared to the previous fiscal year.

OVERVIEW OF THE FINANCIAL STATEMENTS The financial statements are presented as follows: • Government-wide reporting – presents financial statements on a government-wide basis. • Fund financial statements – presents governmental, proprietary and fiduciary fund financial

statements, with the focus on major funds within each fund type. • Measurement focus for governmental activities – in the government-wide financial

statements all activities, including the governmental activities, are reported using the economic resources measurement focus and accrual basis of accounting. The current financial resources focus and modified accrual basis of accounting are followed for the governmental fund financial statements.

• Budgetary reporting – the display of both the original adopted budget and the revised

budget in the budgetary comparison schedules is required by GAAP. These schedules are only required for the general fund and major special revenue funds; these statements are presented as part of the basic financial statements, and the Authority has presented this information for the nonmajor special revenue funds and proprietary funds in the combining and individual fund financial statements and schedules section as additional information.

• Required narrative analysis – the financial statements are required to be accompanied by

narrative introduction and analytical overview of the government’s financial activities in the form of “Management’s Discussion and Analysis” (MD&A).

Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued)

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As presented below, the financial section of the Comprehensive Annual Financial Report (CAFR) for the Authority consists of this discussion and analysis, the basic financial statements and required supplementary information (other than MD&A). There are also additional non-required supplementary schedules presented after the basic financial statements. The basic financial statements include the government-wide financial statements, fund financial statements, including the budgetary statements for the general fund and major special revenue funds, and notes to the financial statements.

Government-wide Financial Statements The government-wide financial statements (see pages 14 - 16) are designed to provide a broad overview of the Authority’s finances in a manner similar to those used by private businesses. All of the activities of the Authority, except those of a fiduciary nature, are included in these statements. The activities of the Authority are broken down into two columns on these statements – governmental activities and business-type activities. A total column for the Authority is also provided. • The governmental activities include the basic services of the Authority including general

government (administration), regional planning, transportation demand management and regional customer services. Grants and general revenues generally support these activities.

• The business-type activities include the private sector type activities which are transit

service operations and light rail transit. These activities are partially supported by user charges and provide substantial benefits, both direct and indirect, to the public at large.

The statement of net assets presents information on all of the Authority’s assets and liabilities, both current and noncurrent, with the difference between the two reported as net assets. The focus on net assets is designed to be similar to the emphasis for businesses. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Authority is improving or deteriorating. To assess the overall health of the


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Authority, other indicators, including non-financial indicators like the Authority’s tax base and the condition of its capital assets, should also be considered. The statement of activities presents information showing how the Authority’s net assets changed over the most recent fiscal year. Since full accrual accounting is used for the government-wide financial statements, all changes to net assets are reported at the time that the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. This statement also focuses on both the gross and net costs of the various functions of the Authority, based only on direct functional revenues and expenses. This is designed to show the extent to which the various functions depend on general taxes and revenues for support. Fund Financial Statements Also presented are more traditional fund financial statements for governmental funds, proprietary funds and fiduciary funds. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or conditions. Funds are used to ensure and demonstrate compliance with finance-related legal requirements as well as for managerial control to demonstrate fiduciary responsibility over the assets of the Authority. Governmental funds – Governmental funds are used to account for most of the Authority’s basic services. Unlike the governmental activities column on the government-wide financial statement, these fund financial statements (pages 17 - 22) focus on near-term inflows and outflows of spendable resources as well as on balances of spendable resources available at the end of the fiscal year. Such information is useful in looking at the Authority’s near-term financial requirements. Since the governmental activities on the statements focus on near-term spendable resources, while the governmental activities on the government-wide financial statements have a longer term focus, a reconciliation of the differences between the two statements is provided following the fund financial statements and is also provided in Note 2 (pages 36 - 37). Proprietary funds – Proprietary funds are used to account for business-type activities of the Authority. Enterprise funds are used for activities that primarily serve customers outside the governmental unit. The proprietary fund financial statements (pages 23 - 25) are prepared using the same long-term focus as the government-wide financial statements. The enterprise funds generally provide information similar to the business-type activities column of the government-wide financial statements, but provide more detail and additional information (i.e., cash flows). Notes to the Financial Statements – The notes to the financial statements (pages 27 – 48) provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements and should be read with the financial statements. Required supplementary information other than MD&A – Governments have an option of including the budgetary comparison statements of the general fund and major special revenue funds as either part of the fund financial statements within the basic financial statements or as required supplementary information after the footnotes. The Authority has chosen to present these budgetary statements as part of the basic financial statements.


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GOVERNMENT-WIDE FINANCIAL ANALYSIS The following tables and analysis discuss the financial position and changes to the financial position for the Authority as a whole as of and for the year ended June 30, 2012, with comparative information for the previous year. Net Assets Net assets may serve over time as a useful indicator of a government’s financial position. The following table reflects the condensed Statement of Net Assets as of June 30, 2012 compared to the prior year:

Percent2012 2011 2012 2011 2012 2011 Change

Current and other assets 48,029.6$ 53,235.3$ 75,408.8$ 43,424.5$ 123,438.4$ 96,659.8$ 27.7%Noncurrent assets

Cash and cash equivalents - - 23,448.7 33,376.2 23,448.7 33,376.2 -29.7%Deferred charges - - 696.1 756.5 696.1 756.5 -8.0%Capital assets 1,199.1 1,346.6 85,449.3 93,285.7 86,648.5 94,632.3 -8.4%

Total assets 49,228.7$ 54,581.9$ 185,003.0$ 170,842.9$ 234,231.7$ 225,424.8$ 3.9%

Other liabilities 1,233.6$ 1,486.5$ 29,506.3$ 29,948.1$ 30,739.9$ 31,434.6$ -2.2%Long-term liabilities 218.7 247.2 97,686.9 103,161.7 97,905.6 103,408.9 -5.3%

Total liabilities 1,452.4$ 1,733.7$ 127,193.1$ 133,109.8$ 128,645.5$ 134,843.5$ -4.6%

Net assets:Invested in capital assets,net of related debt 1,199.1$ 1,346.6$ 6,528.6$ 21,322.7$ 7,727.8$ 22,669.3$ -65.9%Restricted 188.8 178.4 120.7 - 309.4 178.4 73.5%Unrestricted 46,388.5 51,323.2 51,160.6 16,410.2 97,549.1 67,733.4 44.0%

Total net assets 47,776.4$ 52,848.2$ 57,809.9$ 37,732.9$ 105,586.3$ 90,581.1$ 16.6%

Primary GovernmentTotal

(in thousands of dollars)As of June 30

Condensed Statement of Net Assets

ActivitiesGovernmental Business-type

Activities

The Authority’s total net assets increased $15.0 million in FY 2012, comprised of a decrease of $5.1 million in governmental activities and an increase of $20.1 million in business-type activities. Total net assets of the Authority are $105.6 million, of which $97.5 million is unrestricted. Of the $105.6 million total net assets, $7.7 million are the Authority’s investment in capital assets net of accumulated depreciation and related outstanding debt used to acquire those assets. The Authority uses these capital assets to provide services to the region’s citizens; consequently, it is not the Authority’s intention to sell these assets, and they are therefore not available for future spending. The capital assets are reported net of related debt; as discussed in the Capital Assets and Debt Administration section (pages 10 - 11), the Authority has pledged future transportation excise tax revenues to repay the outstanding debt obligations. The capital assets themselves are not intended to be used to liquidate these liabilities. Approximately $97.5 million of the Authority’s net assets (92.4% of the total) represents unrestricted resources that may be used to meet the Authority’s ongoing obligations to citizens, member agencies, contractors and creditors within the respective governmental and business-type activities. The remaining $0.3 million reflects resources that are subject to external restrictions.


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The governmental activities reported a decrease of $4.9 million (9.6%) of unrestricted net assets over the prior year largely attributed to a interfund transfers from the Public Transportation Fund to the Transit Service Operations Fund. The Authority purchased bus fleet and bus stop facilities that were funded with a combination of federal and regional PTF funds. During the year, $28.4 million of the purchased assets were conveyed to Member Cities. The Public Transportation Fund balance was drawn down to cover the local share of the asset purchases. The significant increase of $34.8 million of unrestricted net assets over the prior year in business-type activities is due to PTF transfers to the Valley Metro Rail Fund for capital projects to be expended in FY2013 and FY2014. Changes in Net Assets The following table compares the revenues and expenses of the Authority for the current and previous fiscal year. The increase (decrease) in net assets for each year represents the extent to which revenues were over (under) expenses during the year.

Percent2012 2011 2012 2011 2012 2011 Change

REVENUESProgram revenues:

Charges for services 153.4$ 189.0$ 25,558.8$ 23,374.8$ 25,712.2$ 23,563.8$ 9.1%Operating grants and contributions 13,601.9 2,286.9 1,337.1 2,144.5 14,939.0 4,431.4 237.1%Capital grants and contributions - - 31,347.3 8,289.3 31,347.3 8,289.3 278.2%

General revenues:Sales taxes 112,353.3 107,111.1 - - 112,353.3 107,111.1 4.9%Interest earnings 73.1 79.9 109.8 215.8 182.9 295.7 -38.1%Other 100.2 233.4 16.6 560.6 116.7 794.0 -85.3%

Total revenues 126,281.9 109,900.3 58,369.6 34,585.0 184,651.6 144,485.3 27.8%

EXPENSESGovernmental activities:

Regional planning 1,287.4 2,274.7 - - 1,287.4 2,274.7 -43.4%Transportation demand management 1,391.3 1,542.4 - - 1,391.3 1,542.4 -9.8%Regional customer services 8,044.5 7,995.4 - - 8,044.5 7,995.4 0.6%Administration 1,820.5 1,966.3 - - 1,820.5 1,966.3 -7.4%AZ Lottery fund disbursements 10,346.0 - - - 10,346.0 - N/A

Business-type activities:Transit service operations - - 113,091.6 90,336.8 113,091.6 90,336.8 25.2%Light rail transit - - 33,665.2 66,140.2 33,665.2 66,140.2 -49.1%

Total expenses 22,889.6 13,778.8 146,756.8 156,477.0 169,646.4 170,255.8 -0.4%

Excess (deficit) before transfers 103,392.3 96,121.5 (88,387.2) (121,892.0) 15,005.1 (25,770.5) -158.2%Transfers in (out) (108,464.1) (89,250.2) 108,464.1 89,250.2 - - N/A

Increase (decrease) in net assets (5,071.8)$ 6,871.3$ 20,076.9$ (32,641.8)$ 15,005.1$ (25,770.5)$ -158.2%

Primary GovernmentTotal

(in thousands of dollars)Fiscal year ended June 30

Changes in Net Assets

ActivitiesGovernmental

ActivitiesBusiness-type

The largest sources of revenue for the Authority are sales taxes (60.8%). The major funding sources of governmental activities are sales taxes (89.0%) and federal and state grants (10.8%) The major funding sources for business-type activities are federal grants (53.7%) and charges for services to member cities (43.8%). The Authority’s overall revenues increased by $40.2 million, or 27.8%, compared to last fiscal year. Total revenues of governmental activities increased by $16.4 million, (14.9%) over the previous year due to increased sales tax revenues from Public Transportation Fund ($5.3 million) as well as the incorporation of Arizona Lottery Fund revenues ($11.7 million) which


8

were formerly reported as fiduciary funds. All other governmental program revenues decreased by $0.6 million. Program revenues of business-type activities increased by $24.4 million, or 72.3%, compared to last fiscal year, which is largely attributable to increases in Federal Transit Administration (FTA) capital grants for bus fleet and facilities. Spending of the Authority’s sales tax revenues is limited to funding those activities necessary to implement the Proposition 400 Transit Life Cycle Program (TLCP). The Public Transportation Fund (PTF) revenues are restricted to the implementation of the transit element of the Regional Transportation Plan (RTP). Regional Area Road Fund (RARF) revenue is limited to fund administration in the General Fund and planning activities. Business-type activities are the largest users of resources for the Authority with $146.8 million of expenses (86.5%) which include Transit Service operations and Light Rail Transit lead agency disbursements. Governmental activities expended $22.9 million, with the largest being AZ Lottery fund disbursements of $10.3 million and Regional Customer Services of $8.0 million. Administration, Regional Planning, and Transportation Demand Management activities totaled $4.5 million for the year. Total Primary Government expenses decreased by $0.6 million, or 0.4%, compared to last fiscal year. The governmental expenses increased by $9.1 million, or 66.1%, over the prior year due to the addition of AZ Lottery fund disbursements $10.3 million. All other governmental activity expenses were reduced down by $1.3 million due to conservative spending practices. Business-type activity expenses were decreased by $9.7 million, or 6.2%, compared to the prior year due to decrease of construction related lead agency disbursements in the Valley Metro Rail Fund, down $32.5 million, offset by cost increases within the Transit Service Operations Fund, which were up 22.8 million. The increases in business-type activity expenses were primarily due to capital conveyances of bus fleet and bus stop facilities to Member Cities with $28.4 million expended in FY 2012 versus $7.7 expended in FY 2011. FINANCIAL ANALYSIS OF THE AUTHORITY’S FUNDS As previously mentioned, the Authority maintains fund accounting to demonstrate compliance with budgetary and legal requirements. The following is a brief discussion of financial highlights from the fund financial statements. Governmental Funds The focus of the governmental funds financial statements (pages 17 – 22) is to provide information on near-term inflows, outflows and balances of spendable resources. The fund balance of the governmental funds is $47.4 million, a decrease of $5.0 million, or 9.6%, from the previous year. Of the $47.4 million total fund balance, the Authority has designated $0.2 million restricted for special purpose activities the remainder is in unrestricted fund balance in the General Fund (see Note 6 - page 41). Unrestricted fund balance may serve as a useful indicator of a government’s net resources available for spending at the end of the year. Of the $47.4 million fund balance, $47.2 million is unrestricted. The General Fund accounts for activities that include regional customer service, financial management and agency administration. In addition to PTF and RARF sales tax revenues of $112.3 million, in fiscal year 2012, AZ Lottery fund proceeds of $11.7 million have been added to the General Fund accounts. With the change, General Fund revenues increased $17.1 million (15.9%) over the previous year, bolstered by the $5.2 million increase in PTF sales tax


9

revenues. The $107.9 million PTF sales tax revenue represents the sixth full year of earned revenue and increased by $5.2 million over last year. The sales tax revenue increase was due to the improving economy in the region. Regional Area Road Funds (RARF) sales tax revenues increased slightly by $41 thousand in FY 2012 to $4.5 million. The Transit Planning Fund accounts for activities related to the development of strategies to promote social and economic well-being of the community through the provision of an efficient and effective regional transit system. Revenues decreased $0.5 million (64.7%) due to the reduction of FTA grant awards received and reduction of service charges for planning services. The expenditures decreased from $2.3 million to $1.3 million due to reduced planning activities during the year. Prior to 2006, sales taxes allocated to the Transit Planning Fund were shown as revenues. These monies are now shown as transfers in. Total transfers decreased by 31.0% versus the prior year. The Transportation Demand Management Fund accounts for activities related to the countywide ridesharing program, trip reduction program and clean air campaign. Revenues decreased 8.9% and expenditures decreased 10.0% from the prior year due to decreases in trip reduction program activities. Proprietary Funds The proprietary fund financial statements (pages 23 – 25) are prepared on the same accounting basis and measurement focus as the government-wide financial statements, but provide additional detail since each enterprise fund is a major fund and is shown discretely on the fund statements. The Transit Service Operations Fund accounts for the activities related to the operations of local and express bus, paratransit and vanpool services for the region. Net assets increased slightly by $0.1 million over the prior year to $25.9 million. The Valley Metro Rail Fund accounts for staffing and administrative services that are contractually provided by the Authority to Valley Metro Rail, Inc. (VMR) and the PTF sales tax revenues and expenses of such funds related to the Regional Transportation Plan approved light rail projects. Valley Metro Rail, Inc. is a nonprofit corporation organized for the purpose of planning, designing, constructing and operating the light rail transit project in metropolitan Phoenix (see Note 1(a) on page 27). The Valley Metro Rail Fund has net assets of $31.9 million as of June 30, 2012 as compared to net assets of $12.0 million at the end of the previous year. In fiscal year 2012 the Valley Metro Rail Fund received 43.2% of the total PTF sales tax revenues distributed to the Authority from the Arizona Department of Revenue, totaling $46.7 million and received 11.2% of the $4.5 million RARF sales tax revenue received by the Authority, totaling $0.5 million. Additionally, the Valley Metro Rail Fund received $1.8 million of transfers in of 2009 Bond proceeds from the Transit Service Operations Fund for VMR capital expenditure reimbursements. GENERAL FUND BUDGETARY HIGHLIGHTS The Authority revised the adopted budget during the fiscal year increasing the General Fund revenues budget from $108.2 million to $112.1 million. The primary change was an increase to the Public Transportation Fund revenue from $103.4 million to $107.1 million.


10

For the year ended June 30, 2012, actual expenditures were over the adopted budget amounts by $10.0 million. The variance was attributable to the incorporation of AZ Lottery fund disbursements of $10.3 million as General Fund expenditures which were not included in the annual budget. In prior year financial reporting, the AZ Lottery fund proceeds and disbursements were reported as fiduciary funds and not included in the general fund transactions. The remaining general fund activities were below budget by $0.3 million for the year. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets As of June 30, 2012, the Authority had $86.7 million invested in various capital assets, net of accumulated depreciation, for its governmental and business-type activities. The overall net decrease in the Authority’s capital assets for the current fiscal year was 8.4%, a decrease of 10.9% for governmental activities and a decrease of 8.5% for business-type activities for the current year. Major capital asset events in the current year attributing to the decrease included the following:

• Depreciation expense in the current year totaled $11.5 million, $11.0 million for business type capital assets and $0.4 million for governmental activities capital assets. The depreciation expense was the primary reason for the large decrease in governmental activities capital assets.

The following table provides a breakdown of capital assets of the Authority at June 30, 2012 with comparative information for the previous year. Additional information on the Authority’s capital assets may be found in Note 7 on pages 42 – 43.

Percent2012 2011 2012 2011 2012 2011 Change

Non-depreciable assets:Land -$ -$ 5,292.0$ 5,292.0$ 5,292.0 5,292.0$ 0.0%Work-in-progress - - 2,515.4 2,719.1 2,515.4 2,719.1 -7.5%

Depreciable assets:Transit fleet - - 55,710.4 62,411.0 55,710.4 62,411.0 -10.7%Building - - 12,226.3 12,517.4 12,226.3 12,517.4 -2.3%Site improvements 300.4 384.5 6,768.1 6,610.4 7,068.5 6,994.9 1.1%Computers & software 187.6 317.9 44.1 100.6 231.6 418.6 -44.7%Equipment 572.6 460.1 2,884.3 3,613.4 3,456.9 4,073.5 -15.1%Furniture & fixtures 138.6 184.0 8.7 21.8 147.3 205.8 -28.4%

Total assets 1,199.1$ 1,346.5$ 85,449.3$ 93,285.7$ 86,648.5$ 94,632.3$ -8.4%

Activities Activities Primary Government

Capital Assets, Net of Accumulated Depreciation

As of June 30

(in thousands of dollars)

Governmental Business-type Total


11

Debt Administration At June 30, 2012, the Authority had total bonded debt outstanding (including unamortized premium) of $102.4 million related to business-type activities. The Authority has pledged future transportation excise tax revenues to repay this outstanding debt.

2012 2011

Revenue bonds payable 97.8$ 100.1$ Plus unamortized premium:

Bond premium payable 4.6 5.0

Total 102.4$ 105.1$

ActivitiesBusiness-type

The Authority’s current bond ratings on transportation excise revenue tax bonds are AA+ from Standard & Poor’s and AA from Fitch. Additional information on the Authority’s bonded debt and other long-term liabilities can be found in Note 10 on pages 44 - 45. ECONOMIC FACTORS RPTA undertook a number of key projects during FY 2012, as the agency continues the implementation of the TLCP operating and capital projects. Funding for these projects and studies comes from a combination of sales tax revenues (Public Transportation Funds [PTF] and Regional Area Road Funds [RARF]) and federal grants. The key initiatives for fiscal year 2012 included:

• Successfully completed the first five year performance audit of the Transit Element of the Regional Transportation Plan. The State Auditor General remarked that RPTA had instituted an effective performance management system soon after voter approval of Proposition 400.

• Hired a single Chief Executive Officer to manage an integrated RPTA and METRO

staff effective March 1, 2012.

• Completed the installation of approximately 7,500 NextRide signs throughout the region so customers can call or text requests for the next bus and train arrival times.

• Instituted the July 2012 Service Change – New Transit Book and revised system map;

and improvements to ValleyMetro.org, Customer Communications, and Signage

• Prepared for a pilot program transition for the East Valley Dial-a-Ride program to a brokerage model as a cost savings measure and to reduce travel times for passengers. Under the new program, a contracted broker will dispatch vehicles which are tailored to the specific customer need. Many Dial-a-Ride trips will be completed in fuel efficient sedans generating substantial savings. The pilot program commenced July 1, 2012.

Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Concluded)

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The adopted FY 2013 combined operating and capital budget is $277.1 million (up approximately 19% from fiscal year 2012). The FY 2013 budget includes the seventh full year of projects funded with Proposition 400 PTF sales tax revenues ($114.6 million). Of the $114.6 million PTF revenue budgeted, $52.2 million is for bus operating and bus capital and $44.2 million is for light rail/high capacity capital. The total operating budget of $90.9 million represents a $6.2 million (7%) increase over the fiscal year 2012 operating budget of $84.7 million. The primary increases are due to greater PTF disbursements to member cities for ADA transit operations. The total capital budget of $186.3 million represents an $37.8 million (25%) increase over the fiscal year 2012 capital budget of $148.4 million. The major reasons for the increases in the capital budget are increasing bus equipment purchases and increasing lead agency distributions to VMR for capital project expenditures. The increases in capital expenses correspond to projects programmed in the Transit Life Cycle Program (TLCP) for fiscal year 2013. The budget is balanced; decreases in net assets other than depreciation charges to capital assets are not anticipated for fiscal year 2013. FINANCIAL CONTACT The financial report is designed to provide a general overview of the Authority’s finances and to demonstrate accountability for the use of public funds. Questions about any of the information provided in this report, or requests for additional financial information should be addressed to the Authority’s Chief Financial Officer, Valley Metro RPTA, 101 N. 1st Avenue, Suite 1300, Phoenix, AZ 85003.

Basic Financial Statements

• Government-wide Financial Statements

• Fund Financial Statements

• Notes to the Financial Statements

Valley Metro Regional Public Transportation Authority Statement of Net Assets June 30, 2012

14

Governmental Business-typeActivities Activities Total

Assets

Current Assets:Cash and cash equivalents 38,227,820$ 53,503,741$ 91,731,561$ Receivables 158,425 - 158,425 Due from other governments 9,632,798 21,902,605 31,535,403 Prepaid Items 10,554 2,500 13,054

Total current assets 48,029,597 75,408,846 123,438,443

Noncurrent Assets:Restricted cash and cash equivalents - 23,448,746 23,448,746 Deferred charges - 696,083 696,083 Capital assets, not being depreciated - 7,807,411 7,807,411 Capital assets, net of accumulated depreciation 1,199,127 77,641,923 78,841,050 Total noncurrent assets 1,199,127 109,594,163 110,793,290

Total assets 49,228,724 185,003,009 234,231,733

Liabilities

Liabilities:Current Liabilities

Accounts payable 283,008 6,556,638 6,839,646 Accrued salaries and benefits 230,195 164,138 394,333 Due to other governments 138,326 14,552,086 14,690,412 Revenue bonds payable - 5,085,000 5,085,000 Bond interest payable - 2,577,359 2,577,359 Compensated absences payable 582,109 571,031 1,153,140

Total current liabilities 1,233,638 29,506,252 30,739,890

Noncurrent liabilities:Compensated absences payable 218,714 402,428 621,142 Revenue bonds payable, including unamortized premium - 97,284,446 97,284,446

Total noncurrent liabilities 218,714 97,686,874 97,905,588

Total liabilities 1,452,352 127,193,126 128,645,478 Net Assets

Invested in capital assets, net of related debt 1,199,127 6,528,635 7,727,762 Restricted for transit planning 100,204 - 100,204 Restricted for transportation demand management 88,588 - 88,588 Restricted for capital outlay - 120,650 120,650 Unrestricted 46,388,453 51,160,599 97,549,052

Total net assets 47,776,372$ 57,809,884$ 105,586,256$

See accompanying notes to the financial statements.

Valley Metro Regional Public Transportation Authority Statement of Activities Fiscal Year June 30, 2012

15

Charges for Operating Grants Capital GrantsExpenses Services and Contributions and Contributions

ProgramsGovernmental activities:

Regional planning:Long range 161,945$ 153,445$ 589,367$ -$ Short range 307,283 - 946,643 - Capital 113,311 - 400,200 - Program support 704,870 - - -

Transportation demand management:Trip reduction 779,921 - - - Ridesharing 571,187 - - - Other programs 40,145 - - -

Regional customer services:Marketing 2,018,631 - - - Call center 3,578,569 - - - Other programs 2,447,288 - - -

AZ Lottery fund disbursements 10,345,984 - 11,665,674 - Administration:

Executive director’s office 992,735 - - - Finance & management services 827,759 - - -

Total governmental activities 22,889,628 153,445 13,601,884 -

Business-type activities:Transit service operations 113,091,586 15,857,726 1,337,135 31,347,333 Light rail transit 33,665,209 9,701,059 - -

Total business-type activities 146,756,795 25,558,785 1,337,135 31,347,333 Total primary government 169,646,423$ 25,712,230$ 14,939,019$ 31,347,333$

General revenues:Sales taxes:

Public transportation fundsRegional area road funds

Interest earningsOther income

Transfers in (out) Total general revenues & transfers

Change in net assetsNet assets - beginningNet assets - ending

Program Revenues


(Continued)

16

Governmental Business TypeActivities Activities Total

580,867$ 580,867$ 639,360 639,360 286,889 286,889

(704,870) (704,870)

(779,921) (779,921) (571,187) (571,187)

(40,145) (40,145)

(2,018,631) (2,018,631) (3,578,569) (3,578,569) (2,447,288) (2,447,288) 1,319,690 1,319,690

(992,735) (992,735) (827,759) (827,759)

(9,134,299) (9,134,299)

- (64,549,392)$ (64,549,392) - (23,964,150) (23,964,150) - (88,513,542) (88,513,542)

(9,134,299)$ (88,513,542)$ (97,647,841)$

107,889,134 - 107,889,134 4,464,196 - 4,464,196

73,104 109,799 182,903 100,154 16,586 116,740

(108,464,090) 108,464,090 - 4,062,498 108,590,475 112,652,973

(5,071,801) 20,076,933 15,005,132 52,848,173 37,732,951 90,581,124 47,776,372$ 57,809,884$ 105,586,256$

Net (Expense) Revenues andChanges in Net Assets

Valley Metro Regional Public Transportation Authority Balance Sheet Governmental Funds June 30, 2012

17

Transportation TotalTransit Demand Governmental

General Planning Management FundsAssets

Cash and cash equivalents 38,162,226$ 40,143$ 25,451$ 38,227,820$ Receivables 150,405 - 8,020 158,425 Due from other governments 9,233,293 71,906 327,599 9,632,798 Due from other funds 233,030 - - 233,030 Prepaid Items 10,554 - - 10,554

Total assets 47,789,508$ 112,049$ 361,070$ 48,262,627$

Liabilities and Fund Balances

Liabilities:Accounts payable 251,841$ 8$ 31,159$ 283,008$ Accrued salaries and benefits 210,065 11,837 8,293 230,195 Due to other funds - - 233,030 233,030 Due to other governments 138,326 - - 138,326

Total liabilities 600,232 11,845 272,482 884,559

Fund balances:Nonspendable:

Prepaids 10,554 - - 10,554 Restricted: - 100,204 88,588 188,792 Unassigned: 47,178,722 - - 47,178,722

Total fund balances 47,189,276 100,204 88,588 47,378,068 Total liabilities and fund balances 47,789,508$ 112,049$ 361,070$ 48,262,627$

Reconciliation of the balance sheet to the statementof net assets

Fund balances, total governmentalfunds balance sheet 47,378,068$

Amounts reported for governmentalactivities in the statement of netassets are different because:

Governmental capital assets 4,213,104 Less accumulated depreciation (3,013,977)

Governmental compensated absences (800,823)

Net assets of governmentalactivities, statement of net assets 47,776,372$


Valley Metro Regional Public Transportation Authority Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Fiscal Year Ended June 30, 2012

18

Transportation TotalTransit Demand Governmental

General Planning Management FundsRevenues:

Sales taxes:Public transportation funds 107,889,134$ -$ -$ 107,889,134$ Regional area road funds 4,464,196 - - 4,464,196

Intergovernmental:AZ Lottery fund proceeds 11,665,674 - - 11,665,674 State & county grants & pass through grants - - 400,200 400,200 Federal Transit Administration 292,742 296,625 - 589,367 CMAQ - - 946,643 946,643

Charges for services 153,445 - - 153,445 Interest earnings 73,104 - - 73,104 Miscellaneous 49,598 - 50,556 100,154

Total revenues 124,587,893 296,625 1,397,399 126,281,917

Expenditures:Current:

Regional planning:Long range - 161,939 - 161,939 Short range - 307,283 - 307,283 Capital - 113,311 - 113,311 Program support - 704,870 - 704,870

Transportation demand management:Trip reduction - - 779,921 779,921 Ridesharing - - 571,187 571,187 Other programs - - 40,142 40,142

Regional customer services:Marketing 2,018,631 - - 2,018,631 Call center 3,578,569 - - 3,578,569 Other programs 2,447,288 - - 2,447,288

Administration:Executive director’s office 992,744 - - 992,744 Finance & management services 453,137 - - 453,137

AZ Lottery fund disbursements 10,345,984 - - 10,345,984 Capital outlay 274,580 - - 274,580

Total expenditures 20,110,933 1,287,403 1,391,250 22,789,586

Excess (deficiency) of revenues over (under) expenditures 104,476,960 (990,778) 6,149 103,492,331

Other financing sources (uses):Transfers in 8,962,163 990,776 4,263 9,957,202 Transfers out (118,421,292) - - (118,421,292)

Total other financing sources (uses) (109,459,129) 990,776 4,263 (108,464,090) Net change in fund balances (4,982,169) (2) 10,412 (4,971,759)

Fund balance, beginning 52,171,445 100,206 78,176 52,349,827 Fund balance, ending 47,189,276$ 100,204$ 88,588$ 47,378,068$


Valley Metro Regional Public Transportation Authority Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Fiscal Year Ended June 30, 2012

19

Net change in fund balances, total governmental funds (4,971,759)$

The change in net assets reported for governmental activities in the statement of different because:

1. Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of capitalized assets is allocated over their estimated useful lives and reported as depreciation expense.

This is the amount by which depreciation expense ($420,353) exceeded capital outlay expense ($274,580), net of the loss on capital assets ($1,707) in the current period. (145,773)

2. In the Statement of Activities, only the gain/loss on the sale of capital assets is reported, whereas in the governmental funds, the proceeds from the sale increase financial resources. Thus, the change in net assets differ from the change in fund balance by the book value of capital assets sold. (1,707)

3. The governmental funds, under the modified accrual basis of accounting, do not report the unpaid compensated absences as an expenditure or liability, as they are not paid with expendable available financial resources. In the statement of activities, however, which is presented on the accrual basis, expenses and liabilities are reported regardless of when financial resources are used. 47,438

Change in net assets of governmental activities, statement of activities (5,071,801)$


Valley Metro Regional Public Transportation Authority Statement of Revenues, Expenditures and Changes in Fund Balance – Budget to Actual General Fund Fiscal Year Ended June 30, 2012

20

Variance withFinal Budget

Actual OverOriginal Final Amounts (Under)

Revenues:Sales taxes:

Regional area road funds 4,476,000$ 4,464,196$ 4,464,196$ -$ Public Transportation fund 103,400,000 107,100,000 107,889,134 789,134

Intergovernmental:AZ Lottery Fund Proceeds - 271,281 11,665,674 11,394,393 Federal Transit Administration 150,000 122,000 292,742 170,742

Charges for Services - - 153,445 153,445 Interest earnings 20,000 20,000 73,104 53,104 Miscellaneous 152,885 152,885 49,598 (103,287)

Total revenues 108,198,885 112,130,362 124,587,893 12,457,531

Expenditures:Current:Regional Customer Services:

Marketing 2,154,406 2,154,406 2,018,631 135,775 Call Center 3,718,607 3,768,197 3,578,569 189,628 Other Programs 2,449,047 2,492,047 2,447,288 44,759

AZ Lottery Fund Disbursements - - 10,345,984 (10,345,984) Executive director’s office 1,181,579 1,186,579 992,744 193,835 Finance & management services 377,399 377,399 453,137 (75,738) Capital Outlay 178,000 153,000 274,580 (121,580)

Total expenditures 10,059,038 10,131,628 20,110,933 (9,979,305)

Excess of revenues over expenditures 98,139,847 101,998,734 104,476,960 2,478,226

Other financing uses:Transfers in 8,197,175 10,988,034 8,962,163 (2,025,871) Transfers out (102,473,521) (105,384,113) (118,421,292) (13,037,179)

Total other financing uses (94,276,346) (94,396,079) (109,459,129) (15,063,050)

Net change in fund balance 3,863,501 7,602,655 (4,982,169) (12,584,824)

Fund balance, beginning 52,171,445 52,171,445 52,171,445 -

Fund balance, ending 56,034,946$ 59,774,100$ 47,189,276$ (12,584,824)$


Budgeted Amounts

Valley Metro Regional Public Transportation Authority Statement of Revenues, Expenditures and Changes in Fund Balance – Budget to Actual Transit Planning Fund Fiscal Year Ended June 30, 2012

21



Revenues:Intergovernmental:

Federal Transit Administration 274,720$ 274,720$ 296,625 21,905$ Charges for Services - - - - Miscellaneous - - - -

Total revenues 274,720 274,720 296,625 21,905

Expenditures:Current:Regional planning:

Long range 115,546 136,723 161,939 25,216 Short range 455,166 431,666 307,283 (124,383) Capital 180,188 145,187 113,311 (31,876) Program support 705,752 693,626 704,870 11,244

Total expenditures 1,456,652 1,407,202 1,287,403 (119,799)

Excess of revenues over expenditures (1,181,932) (1,132,482) (990,778) 141,704

Other financing uses:Transfers in 1,181,932 1,132,482 990,776 (141,706)

Total other financing uses 1,181,932 1,132,482 990,776 (141,706)

Net change in fund balance - - (2) (2)

Fund balance, beginning 100,206 100,206 100,206 -

Fund balance, ending 100,206$ 100,206$ 100,204$ (2)$


Budgeted Amounts

Valley Metro Regional Public Transportation Authority Statement of Revenues, Expenditures and Changes in Fund Balance – Budget to Actual Transportation Demand Management Fund Fiscal Year Ended June 30, 2012

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Revenues:Intergovernmental:

State grants & pass through grants 583,001$ 578,001$ 400,200$ (177,801)$ CMAQ 994,000 964,000 946,643 (17,357) Miscellaneous - - 50,556 50,556

Total revenues 1,577,001 1,542,001 1,397,399 (144,602)

Expenditures:Current:Transportation Demand Management:

Trip reduction 655,000 620,000 779,921 159,921 Ridesharing 594,000 594,000 571,187 (22,813) Other programs 346,809 346,809 40,142 (306,667)

Total expenditures 1,595,809 1,560,809 1,391,250 (169,559)

Excess of revenues over expenditures (18,809) (18,808) 6,149 24,957

Other financing uses:Transfers in 18,809 18,808 4,263 (14,545)

Total other financing uses 18,809 18,808 4,263 (14,545)

Net change in fund balance 0 - 10,412 10,412

Fund balance, beginning 78,176 78,176 78,176 -

Fund balance, ending 78,176$ 78,176$ 88,588$ 10,412$


Budgeted Amounts

Valley Metro Regional Public Transportation Authority Statement of Net Assets Proprietary Funds June 30, 2012

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TotalTransit Service Valley Metro Proprietary

Operations Rail FundsAssets

Current assetsCash and cash equivalents 20,829,904$ 32,673,836$ 53,503,740$ Due from other governments 19,941,339 1,961,266 21,902,605 Due from other funds - 1,019,215 1,019,215 Prepaid Items 2,500 - 2,500

Total current assets 40,773,743 35,654,317 76,428,060

Noncurrent assetsRestricted cash and cash equivalents 23,448,747 - 23,448,747 Deferred charges 696,083 - 696,083 Capital assets, not being depreciated 7,807,411 - 7,807,411 Capital assets, net of accumulated depreciation 77,641,923 - 77,641,923

Total noncurrent assets 109,594,164 - 109,594,164

Total assets 150,367,907 35,654,317 186,022,224

Liabilities

Current liabilities:Accounts payable 6,556,638 - 6,556,638 Accrued salaries and benefits 16,669 147,469 164,138 Due to other funds 1,019,215 - 1,019,215 Due to other governments 11,831,858 2,720,228 14,552,086 Bond payable - current 5,085,000 - 5,085,000 Bond interest payable 2,577,359 - 2,577,359 Compensated absences payable 69,522 486,614 556,137

Total current liabilities 27,156,261 3,354,311 30,510,573

Noncurrent liabilities:Compensated absences payable 52,169 365,153 417,321 Revenue bonds payable, including unamortized premium 97,284,446 - 97,284,446

Total noncurrent liabilities 97,336,615 365,153 97,701,767

Total liabilities 124,492,876 3,719,464 128,212,340

Net Assets

Invested in capital assets, net of related debt 6,528,635 - 6,528,635 Restricted for capital outlay 120,650 - 120,650 Unrestricted 19,225,746 31,934,853 51,160,599

Total net assets 25,875,031$ 31,934,853$ 57,809,884$


Business-Type Activities - Enterprise Funds

Valley Metro Regional Public Transportation Authority Statement of Revenues, Expenses and Changes in Fund Net Assets Proprietary Funds Fiscal Year Ended June 30, 2012

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TotalTransit Service Proprietary

Operations Valley Metro Rail Funds

Operating Revenues:Charges for services 15,857,726$ 9,701,059$ 25,558,785$ Miscellaneous 13,055 3,531 16,586

Total operating revenues 15,870,781 9,704,590 25,575,371

Operating Expenses:Local & express bus service 42,237,399 - 42,237,399 Light rail staff and administration - 9,546,161 9,546,161 Paratransit service 10,863,296 - 10,863,296 Vanpool service 749,235 - 749,235 Safety and security 308,911 - 308,911 Administrative and general 121,806 - 121,806 Depreciation 11,025,829 - 11,025,829

Total operating expenses 65,306,476 9,546,161 74,852,637 Operating income (loss) (49,435,695) 158,429 (49,277,266)

Non-Operating Revenues (Expenses):

Lead agency disbursements (14,671,568) (24,119,048) (38,790,616) IRS fuel tax credit 512,860 - 512,860 Interest income 79,323 30,476 109,799 Loss on disposal of capital assets 31,755 - 31,755 AZ Lottery fund proceeds 262,989 - 262,989 Capital conveyance (28,368,147) - (28,368,147) Interest subsidy 589,923 - 589,923 Interest expense (4,745,395) - (4,745,395) Bond issuance expense (60,392) - (60,392)

Total non-operating revenues (expenses) (46,368,652) (24,088,572) (70,457,224) Income (loss) before contributions and transfers (95,804,347) (23,930,143) (119,734,490)

Capital contributions 31,347,333 - 31,347,333 Transfers in 74,909,938 48,969,372 123,879,310 Transfers out (10,360,738) (5,054,482) (15,415,220)

Changes in net assets 92,186 19,984,747 20,076,933

Net assets, beginning 25,782,845 11,950,106 37,732,951

Net assets, ending 25,875,031$ 31,934,853$ 57,809,884$



Valley Metro Regional Public Transportation Authority Statement of Cash Flows Proprietary Funds Fiscal Year Ended June 30, 2012

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Transit Valley TotalService Metro Proprietary

Operations Rail FundsCash flows from operating activities

Receipts from customers 29,840,735$ 14,891,978$ 44,732,713$ Payments to suppliers (54,575,116) (2,541,560) (57,116,676) Payments to employees (1,038,609) (8,846,896) (9,885,505)

Net cash provided by (used in) operating activities (25,772,990) 3,503,522 (22,269,468)

Cash flows from noncapital and related financing activities

Transfers in - sales taxes 74,909,938 48,969,372 123,879,310 Transfers out (10,360,738) (5,054,482) (15,415,220) Lead agency disbursements (14,671,568) (500,000) (15,171,568) AZ Lottery fund proceeds 262,989 - 262,989 Due to/from other funds (6,708,344) (1,935,645) (8,643,989) Federal alternative fuel tax credit 512,860 - 512,860

Net cash provided by (used in) noncapital and related financing activities 43,945,137 41,479,245 85,424,382

Cash flows from capital and related financing activities

Purchases of capital assets (3,157,735) - (3,157,735) Conveyance of capital assets (28,368,147) - (28,368,147) Principal payments on long-term debt (2,265,000) - (2,265,000) Lead agency disbursements - (23,619,048) (23,619,048) Capital contributions 31,347,333 - 31,347,333 Interest subsidy 589,923 - 589,923 Interest paid on capital debt (5,205,192) - (5,205,192)

Net cash provided by (used in) capital and related financing activities (7,058,818) (23,619,048) (30,677,866)

Cash flows from investing activitiesInterest received on investments 79,323 30,476 109,799

Net cash provided by (used in) investing activities 79,323 30,476 109,799

Net increase in cash and cash equivalents 11,192,654 21,394,195 32,586,849 Cash and cash equivalents, beginning of year 33,085,997 11,279,641 44,365,638 Cash and cash equivalents, end of year 44,278,651$ 32,673,836$ 76,952,487$

From the Proprietary Funds Statement of Net AssetsCurrent cash and cash equivalents 20,829,904 32,673,836 53,503,740 Noncurrent cash and cash equivalents 23,448,747 - 23,448,747

Total cash and cash equivalents 44,278,651$ 32,673,836$ 76,952,487$

Reconciliation of operating income (loss) to net cash provided by (used in) operating activitiesOperating income (loss) (49,435,695) 158,429 (49,277,266) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities:

Depreciation 11,025,829 - 11,025,829 (Increase) decrease in assets:

Due from other governments 13,983,009 5,190,919 19,173,928 Increase (decrease) in liabilities:

Accounts payable 3,332,773 - 3,332,773 Accrued salaries and benefits 2,975 62,162 65,137 Due to other governments (4,705,830) (1,976,234) (6,682,064) Compensated absences payable 23,949 68,247 92,196

Total adjustments 23,662,705 3,345,093 27,007,798 Net cash provided by (used in) operating activities (25,772,990)$ 3,503,522$ (22,269,468)$



Notes to the Financial Statements

Valley Metro Regional Public Transportation Authority Notes to the Financial Statements Fiscal Year Ended June 30, 2012

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1. Summary of Significant Accounting Policies The accounting policies of the Regional Public Transportation Authority (the Authority) conform to accounting principles generally accepted in the United States of America (GAAP) as applicable to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The following summary of the more significant accounting policies of the Authority is presented to assist the reader in interpreting these financial statements, and should be viewed as an integral part of this financial report. a. Financial Reporting Entity

The Authority was established under the laws of the State of Arizona in 1985 along with the passage of a one-half of one percent sales tax increase to fund regional highway and public transportation improvements. The Authority was charged with developing a regional transit plan and developing and operating a regional transit system for Maricopa County (the County). In 1993, the Authority’s Board of Directors adopted Valley Metro as the identity for the regional transit system. Valley Metro was chosen to give the region’s buses a more recognizable identity and to help unify public transit systems in the County. The Authority is governed by a Board of Directors consisting of a member of the County Board of Supervisors and the mayors (or their designees) of the member cities and towns. For fiscal year 2011-12, the members included the cities of Avondale, Chandler, El Mirage, Glendale, Goodyear, Mesa, Peoria, Phoenix, Scottsdale, Surprise, Tempe and Tolleson, and the towns of Buckeye, Gilbert and Queen Creek. A municipality may have one elected official serve on the Authority’s Board of Directors by adopting an ordinance declaring its participation. In October 2002, the city councils of Glendale, Mesa, Phoenix and Tempe approved the formation of a public nonprofit corporation by the name of Valley Metro Rail, Inc. (VMR). The nonprofit corporation was organized for the purpose of planning, designing, constructing and operating the Light Rail Transit Project. In February of 2012, the Board of Directors for the Authority and VMR took action to appoint a single CEO to manage both financial entities under a single integrated agency. The Authority and VMR entered into an intergovernmental agreement providing for the single CEO to serve both organizations effective March 1, 2012. VMR contracts with the Authority for certain administrative functions, including personnel, administration and financial and accounting services. This activity is recorded in the Authority’s Valley Metro Rail Enterprise Fund. The Board of VMR is solely responsible for the governance of VMR, and the Authority’s Board of Directors has no responsibility for VMR. VMR is not a component unit of the Authority because the economic resources received by VMR are entirely for the direct benefit of VMR, and the Authority is not entitled to and has no ability to otherwise access any of the economic resources received or held by VMR. However, VMR is a related party of the Authority since the cities who are members of VMR’s Board of Directors are also members of the Authority’s Board of Directors.

Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2012

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b. Basic Financial Statements The government-wide financial statements (statement of net assets and statement of activities) report on the Authority as a whole, excluding fiduciary activities. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The government-wide financial statements focus more on the sustainability of the Authority as an entity and the change in aggregate financial position resulting from the activities of the fiscal period. Generally, the effect of interfund activity has been removed from the government-wide financial statements. Net interfund activity and balances between governmental activities and business-type activities are shown in the government-wide financial statements. The government-wide Statement of Net Assets reports all financial and capital resources of the government (excluding fiduciary funds). It is displayed in a format of assets less liabilities equal net assets, with the assets and liabilities shown in order of their relative liquidity. Net assets are required to be displayed in three components: 1) invested in capital assets, net of related debt, 2) restricted and 3) unrestricted. Invested in capital assets, net of related debt is capital assets net of accumulated depreciation and reduced by outstanding balances of any bonds, mortgages, notes or other borrowings that are attributable to the acquisition, construction or improvement of those assets. Restricted net assets are those with constraints placed on their use by either: 1) externally imposed by creditors (such as through debt covenants), grantors, contributors or laws or regulations of other governments, or 2) imposed by law through constitutional provisions or enabling legislation. All net assets not otherwise classified as restricted are shown as unrestricted. Generally, the Authority would first apply restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net assets are available. Reservations or designations of net assets imposed by the reporting government, whether by administrative policy or legislative action of the reporting government, are not shown on the government-wide financial statements. Note 6 discusses the internal reservations and designations of fund balances/net assets in the various funds to demonstrate the government’s intended use of those net assets. The government-wide Statement of Activities demonstrates the degree to which the direct expenses of the various functions and segments of the Authority are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or users who purchase, use or directly benefit from goods, services or privileges provided by a particular function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes, investment income and the other revenues not identifiable with particular functions or segments are included as general revenues. The general revenues support the net costs of the functions and segments not covered by program revenues.


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Also part of the basic financial statements are fund financial statements for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.

c. Basis of Presentation The accounts of the Authority are organized and operated on the basis of funds. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts, which includes assets, liabilities, fund equity, revenues and expenditures/expenses. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained consistent with legal and managerial requirements. The following fund categories (further divided by fund type) are used by the Authority: Governmental Funds Governmental funds are used to account for the Authority’s general government activities. The focus of Governmental Fund measurement, in the fund financial statements, is upon determination of financial position and changes in financial position rather than upon net income. The Authority reports the following major Governmental Funds:

The General Fund is the Authority’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Transit Planning Fund accounts for the receipt and expenditure of U.S. Department of Transportation, Federal Transit Administration, Federal Transit Technical Studies grant monies, regional area road fund sales taxes and member cities local match restricted for various planning studies. The Transportation Demand Management Fund accounts for the receipt and expenditure of various grant monies restricted for activities related to the countywide ridesharing program, trip reduction program and clean air campaign.

Proprietary Funds Proprietary funds account for activities of the Authority similar to those found in the private sector, where cost recovery and the determination of net income are useful or necessary for sound fiscal management. The focus of proprietary fund measurement is upon the determination of operating income, changes in net assets, financial position and cash flows. Currently, enterprise funds are the only type of proprietary funds that the Authority uses. Enterprise funds are used to account for those operations that provide services to the general public for a fee. Enterprise funds are also required for any activity whose principal revenue sources meet any of the following criteria: 1) any activity that has


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issued debt backed solely by the fees and charges of the activity, 2) if the cost of providing services for an activity, including capital costs such as depreciation or debt service, must legally be recovered through fees and charges, or 3) it is the policy of the Authority to establish activity fees or charges to recover the cost of providing services, including capital costs. The Authority reports the following major enterprise funds:

The Transit Service Operations Fund accounts for the activities related to the operations of local and express bus, dial-a-ride and vanpool services for the region. The Valley Metro Rail Fund accounts for the activities related to the staffing and administrative services that are contractually provided by the Authority to Valley Metro Rail, Inc. and transfers in of the Public Transportation Fund (PTF) and the Regional Area Road Funds (RARF) sales tax revenues and expenses of such funds related to the Regional Transportation Plan approved light rail projects.

d. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Governmental fund types are presented, in the fund financial statements, using the flow of current financial resources measurement focus and modified accrual basis of accounting. With this measurement focus, operating statements present increases and decreases in net current assets and unrestricted fund balance is a measure of available spendable resources. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they are “measurable and available”). “Measurable” means the amount of the transaction can be determined and “available” means collectible within the current period or soon thereafter to pay liabilities of the current period. The Authority considers revenues available under modified accrual, if they are earned by June 30 (all eligibility requirements have been met) and the revenue is expected to be collected within six months after year-end. Expenditures are recorded when the related fund liability is incurred. This is the traditional basis of accounting for governmental funds and also is the manner in which these funds are normally budgeted. This presentation is deemed most appropriate to 1) demonstrate legal and covenant compliance, 2) demonstrate the sources and uses of liquid resources, and 3) demonstrate how the Authority’s actual revenues and expenditures conform to the annual budget. Since the governmental fund financial statements are presented on a different basis than the governmental activities column of the government-wide financial statements, a reconciliation is provided immediately following each fund statement. These reconciliations briefly explain the adjustments necessary to transform the fund financial statements into the governmental activities column of the government-wide financial statements. Additional reconciliations are also provided in Note 2.


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When applying the “susceptible to accrual” concept to intergovernmental revenues pursuant to GASB Statement No. 33 – Recipient Reporting for Certain Shared Non-exchange Transactions (Statement No. 33), receivables and revenues are recognized when the applicable eligibility requirements, including time requirements, are met. Resources transmitted before the eligibility requirements are met are reported as deferred revenue. Interest income is recognized on the modified accrual basis. Changes in fair value of investments are recognized in investment income at the end of the year. Sales taxes, entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. For the governmental fund statements, grant revenue earned but not expected to be received within six months of year end is deferred. The flow of economic resources measurement focus emphasizes the determination of net income. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. On the proprietary fund financial statements, operating revenues are those that flow directly from the operations of that activity, i.e., charges to customers or users who purchase or use the goods or services of that activity. Operating expenses are those that are incurred to provide those goods or services. Non-operating revenues and expenses are items like investment income and interest expense that are not a result of the direct operations of the activity. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The Authority has elected not to follow subsequent private-sector guidance.

e. Budgetary Basis of Accounting An annual budget of revenues and expenditures is prepared and adopted by the Board of Directors each fiscal year for all funds. The legal level of budgetary control is the total annual appropriated budget. Costs in excess of the total annual appropriated budget require approval of the Board of Directors. Transfers of appropriations between departments require the approval of the Chief Executive Officer. The annual budget is adopted on the modified accrual basis. Encumbrance accounting is used and all appropriations lapse at year end. Prior to final adoption, a proposed budget is presented to the Board of Directors for review and public comment is received. Final adoption of the budget must be on or before June 30 of each year.


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Budgetary comparison statements for the general fund and major special revenue funds must be presented as part of the basic financial statements or as required supplementary information. The Authority has chosen to present this information as part of the basic financial statements. These statements must display original budget, amended budget and actual results (on a budgetary basis). Budgetary comparisons for the major enterprise funds are presented in the combining statements following the notes to the financial statements. Where necessary, a reconciliation has been provided of the adjustments required to convert the budgetary revenues and expenditures or changes in net assets on a budgetary basis to revenues and expenditures/expenses or change in net assets on a GAAP basis.

f. Deposits and Investments State statutes authorize the Authority to invest in obligations of the U.S. Treasury and any of its agencies, corporations or instrumentalities, collateralized repurchase agreements, certificates of deposit and the State of Arizona’s Local Government Investment Pool (LGIP). Currently the Authority invests only in the LGIP, which is operated by the Arizona State Treasurer’s Office, as authorized by Arizona Revised Statues, §35-326. Arizona Revised Statutes §35-312 and §35-313 regulate authorized investments. Local Government Investment Pool investments are carried at fair value. The fair value of pooled investments is determined annually and is based on current market prices. The fair value of participants’ position in the pool approximates the value of the pool shares. The method used to determine the value of participants’ equity withdrawn is based on the book value of the participants’ percentage participation at the date of such withdrawal. The Authority maintains pooled cash and investments. Income from pooled cash and investments is allocated to the individual funds based on the fund’s month end cash balance in relation to the total pooled cash and investments. Authority management has determined that the investment income related to all funds except the Public Transportation Fund and Valley Metro Rail Enterprise Fund should be allocated to the General Fund. Each fund’s equity in the pooled cash and investments is tracked on an ongoing basis. In the event that a certain fund overdraws its share of pooled cash, the overdraft is reported as due to other funds at year end.

g. Prepaid Items

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.

h. Capital Assets All capital assets, whether owned by governmental activities or business-type activities, must be recorded and depreciated (unless the modified approach is used) in the government-wide financial statements. No long-term assets or depreciation are shown in the governmental fund financial statements.


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Capital assets are defined as assets with an initial, individual cost of more than $5,000 and an estimated useful life greater than one year. The Authority has no public domain infrastructure (e.g., roads, bridges, sidewalks and other assets that are immovable and of value only to the Authority) or capital construction projects. Capital assets are recorded at cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at the estimated fair market value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Major improvements are capitalized and depreciated over the remaining useful lives of the related capital assets. Property, plant and equipment are depreciated using the straight-line method over the following estimated useful lives:

Useful Life Assets (Years) Equipment 3-20 Vehicles

Cars and vans 4 Buses greater than 30 feet 10 Buses greater than 40 feet 20

Computers and software 3 Site improvements 16-30 Buildings 46-50

Capital assets transferred between funds are transferred at their net book value (cost less accumulated depreciation) or net realizable value, if lower, as of the date of the transfer.

i. Transactions Between Funds Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are reported in the fund financial statements as “due to/from other funds”. See Note 5 for further discussion of the interfund receivables/payables at June 30. Certain transactions occurring between funds that are combined within the same fund type or displayed in the same financial statement column for presentation in these annual financial statements have been eliminated from the financial statements. In the government-wide financial statements, only the net interfund activity and balances between governmental activities and business-type activities are shown (reported as “internal balances”).

j. Receivables Receivables primarily result from accrued member city service billings and various grants awarded by the Federal Transit Administration and the Federal Highway Administration. The grant receivables are passed through to the Authority and are due from the City of Phoenix, Maricopa Association of Governments, Maricopa County, and the Arizona Department of Transportation as reimbursement for eligible grant expenditures associated with operating, capital projects and capital maintenance.


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k. Compensated Absences

Employees of the Authority are entitled to 23.6 - 31.5 paid time off days (vacation and sick leave) per calendar year - based on an eight-hour workday, depending upon length of service. For governmental funds, there is no legal requirement to accumulate expendable available financial resources to liquidate the obligation; thus expenditures are recognized in the governmental funds when payments are made to employees. The current portion of the accrued compensated absences liability is based on the average annual amount of leave charged over the preceding three years. Generally, resources from the General Fund are used to liquidate the governmental funds liabilities for compensated absences.

l. Long-term Obligation In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities on the statement of net assets. Bond premiums and discounts, as well as issuance costs and the difference between the reacquisition price and the net carrying amount of the old debt, are deferred and amortized over the life of the bonds using the straight-line method over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

m. Net Assets In the government-wide financial statements, net assets are reported in three categories: net assets invested in capital assets, net of related debt; restricted net assets; and unrestricted net assets. Net assets invested in capital assets, net of related debt is separately reported because capital assets make up a significant portion of total net assets. Restricted net assets account for the portion of net assets restricted by parties outside the Authority. Unrestricted net assets are the remaining net assets not included in the previous two categories.

n. Fund Balances Fund balances of the governmental funds are reported separately within classifications based on a hierarchy of the constraints placed on the use of those resources. The classifications are based on the relative strength of the constraints that control how the specific amounts can be spent. The classifications are nonspendable and spendable fund balances. Spendable fund balances include restricted, committed, assigned and unassigned fund balance classifications. The nonspendable fund balance classification includes amounts that cannot be spent because they are either not in spendable form such as inventories, or are legally or contractually required to be maintained intact.


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Restricted fund balances are those that have externally imposed restrictions on their usage by creditors (such as through debt covenants), grantors, contributors, or laws and regulations. The committed fund balances are self-imposed limitations approved by the Authority’s Board of Directors, which is the highest level of decision-making authority within the Authority. Only RPTA’s Board of Directors can remove or change the constraints placed on committed fund balances. The formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the Board of Directors at a Board of Directors meeting. The Board of Directors must commit fund balances before the end of the fiscal year. Assigned fund balances are resources constrained by the Authority’s intent to be used for specific purposes, but are neither restricted nor committed. The Board of Directors has authorized the Chief Executive Officer or designee to make assignments of resources for a specific purpose. The unassigned fund balance is the residual classification for the General Fund and includes all spendable amounts not reported in the other classifications. Also, deficits in fund balances of the other governmental funds are reported as unassigned. When an expenditure is incurred, it is the Authority’s policy to use restricted fund balance first, then committed, assigned and unassigned fund balances as resources are available.

o. Cash Equivalents The Authority considers short-term investments in the State of Arizona’s Local Government Investment Pool, mutual fund-money market, U.S. Treasury bills and notes with maturities of three months or less at acquisition date to be cash equivalents.

p. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America necessarily requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenditures during the reporting financial period. Actual results could differ from these estimates.


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2. Reconciliation of Governmental Fund Financial Statements to Government-Wide Statements The governmental fund financial statements are presented on a current financial resources measurement focus and modified accrual accounting basis while the government-wide financial statements are prepared on a long-term economic resources measurement focus and accrual accounting basis. Reconciliations briefly explaining the adjustments necessary to transform the fund financial statements into the governmental activities column of the government-wide financial statements immediately follow each fund financial statement. Additional reconciliations are provided below. Reconciliation of Governmental Funds Balance Sheet and the government-wide Statement of Net Assets:

ReclassificationsTotal Long-term for Internal Statement of

Governmental Assets/ Balances and Net AssetsFunds Liabilities Eliminations Totals

AssetsCash and cash equivalents 38,227,820$ -$ -$ 38,227,820$ Receivables 158,425 - - 158,425 Due from other governments 9,632,798 - - 9,632,798 Due from other funds 233,030 - (233,030) - Prepaid items 10,554 - - 10,554 Capital assets (net) - 1,199,127 - 1,199,127

Total assets 48,262,627$ 1,199,127$ (233,030)$ 49,228,724$

LiabiltiesAccounts payable 283,008$ -$ -$ 283,008$ Accrued salaries and benefits 230,195 - - 230,195 Due to other funds 233,030 - (233,030) - Due to other governments 138,326 - - 138,326 Compensated absences - 800,823 - 800,823

Total liabilities 884,559 800,823 (233,030) 1,452,352

Fund Balance/Net AssetsTotal fund balance/net assets 47,378,068$ 398,304$ -$ 47,776,372$

When capital assets that are to be used in governmental activities are purchased, the costs of those assets are reported as expenditures in governmental funds, and thus a reduction in fund balance. However, the statement of net assets includes those capital assets among the assets of the Authority as a whole:

Interfund transactions between governmental activities of $233,030 are eliminated in the consolidation of these activities for the statement of net assets.

Cost of capital assets 4,213,104$ Accumulated depreciation (3,013,977) Capital assets, net 1,199,127$


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Under the modified accrual basis of accounting, the governmental funds do not accrue for unpaid compensated absences in the amount of $800,823 as a liability, as they are not paid with expendable available financial resources. However, the statement of net assets includes the unpaid compensated absences as long-term liabilities regardless of when financial resources are used, and thus a reduction in net assets. Reconciliation of Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances and the Government-wide Statement of Activities:

Total Statement ofGovernmental Capital Depreciation Compensated Activities

Funds Purchases and Disposals Absences TotalsRevenuesSales taxes 112,353,330$ -$ -$ -$ 112,353,330$ Intergovernmental 13,601,884 - - - 13,601,884 Interest earnings 73,104 - - - 73,104 Charges for services 153,445 - - - 153,445 Miscellaneous 100,154 - - - 100,154

Total revenues 126,281,917 - - - 126,281,917

Expenditures/ExpensesCurrent:

Regional planning 1,287,409 - - - 1,287,409 Transportation demand management 1,391,253 - - - 1,391,253 Regional customer services 7,915,241 - 129,247 - 8,044,488 AZ Lottery fund disbursements 10,345,984 - - - 10,345,984 Administration 1,575,119 - 292,813 (47,438) 1,820,494 Capital outlay 274,580 (274,580) - - - Total expenditures/expenses and other uses 22,789,586 (274,580) 422,060 (47,438) 22,889,628

Other financing uses/changes in net assetsTransfers in 9,957,202 - - - 9,957,202 Transfers out (118,421,292) - - - (118,421,292)

Net transfers (108,464,090) - - - (108,464,090)

Net change for the year (4,971,759)$ 274,580$ (422,060)$ 47,438$ (5,071,801)$ When capital assets that are to be used in governmental activities are purchased, the resources expended for those assets are reported as expenditures in governmental funds. However, in the statement of activities, the cost of those assets is allocated over their useful lives and reported as depreciation expense. As a result, fund balance decreases by the amount of the financial resources expended for capital outlay ($274,580), whereas net assets decrease by the amounts of disposals and depreciation expense charged for the year ($422,060). The governmental funds do not report the change in unpaid compensated absences in the amount of ($47,438) as expenditures, as they are not paid with expendable available financial resources. However, the statement of net assets includes the change in unpaid compensated absences as accrued expenses regardless of when financial resources are used, and thus a reduction in net assets.


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3. Deposits and Investments The Authority maintains a cash and investment pool that is available for use by all funds. Each fund type’s portion of this pool is displayed on the government-wide Statement of Net Assets as “Cash and Investments”. a. Deposits

The carrying amount of the Authority’s deposits at June 30, 2012, was $81,105,635 and the bank ledger balance was $83,920,575. The difference of $2,814,940 represents deposits in transit and outstanding checks. Of the bank balance, $250,000 was covered by federal depository insurance and $83,670,575 was covered by collateral held by the pledging financial institution in the Authority’s name. Cash held with trustee in the amount of $30,981,067 has federal depository insurance coverage in the amount of $250,000 and $30,731,067 was covered by a Tri-Party Collateral Agreement held by the Wells Fargo Bank, N.A., the Bank of New York Mellon, and the Authority.

b. Investments Interest Rate Risk. As a means of managing its exposure to fair value losses arising from increasing interest rates, the Authority’s investment policy provides for matching investment maturities with anticipated cash flow requirements while maintaining an emphasis on liquidity. Unless matched to a specific cash flow requirement, the Authority will not directly invest in securities maturing more than two years from the date of purchase. Historically, the Authority has limited its investments to participation in the State of Arizona’s Local Government Investment Pool (LGIP). As of June 30, 2012, the Authority’s investments in the LGIP, investing in money market mutual funds, have the weighted average maturities less than 90 days. Credit Risk. State statutes authorize the Authority to invest in obligations of the U.S. Treasury and any of its agencies, corporations or instrumentalities, collateralized repurchase agreements, certificates of deposit and the LGIP. The Authority’s investment policy does not further limit its investment choices. The LGIP is operated by the Arizona State Treasurer’s Office, as authorized by Arizona Revised Statutes §35-326. Arizona Revised Statutes §35-312 and §35-313 regulate authorized investments. The Authority’s investment in the LGIP is stated at fair value, which is the same as the value of the Authority’s pool shares. The LGIP does not receive a credit quality rating. Investments, including investments held by trustee, at June 30, 2012 consist of the following:

State of Arizona Local Government Investment Pool 3,093,605$ Governmental Accounting Standards Board Statement No. 40, Deposit and Investment Risk Disclosures, provides for disclosures of custodial credit risk associated with investment securities. An exception is provided for investments in external investment pools and for investments in open-ended mutual funds.


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Cash and Investments at June 30, 2012 consist of the following:

Carrying amount of the Authority’s deposits 81,105,635$ Investments in the LGIP 3,093,605 Cash and investments with Trustee 30,981,067

Total cash and investments 115,180,307$

4. Receivables and Due from Other Governments

Receivables primarily result from accrued member city service billings and various grants awarded by the Federal Transit Administration and the Federal Highway Administration. The grant receivables are passed through to the Authority and are due from the City of Phoenix, Maricopa Association of Governments, Maricopa County, and the Arizona Department of Transportation as reimbursement for eligible grant expenditures associated with operating, capital projects and capital maintenance. Due from Other Governments at June 30, 2012 consist of the following:

Governmental ProprietaryFunds Funds Total

Due from Other Governments

Arizona State Treasurer-PTF Funds 9,106,246$ -$ 9,106,246$ AZ Dept of Transportation 81,006 107,364 188,370 City of Mesa 131 386,161 386,293 City of Peoria - 42,175 42,175 City of Phoenix 183,430 17,472,084 17,655,514 City of Tempe 11,976 1,707,245 1,719,221 Maricopa Assoc. of Governments 96,858 - 96,858 Maricopa County TRP/DOT 151,947 - 151,947 Town of Gilbert - 226,310 226,310 Valley Metro Rail, Inc. 1,203 1,961,266 1,962,469

Total Due from Other Governments 9,632,798$ 21,902,605$ 31,535,403$

Due fromOther Governments By Fund Type


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5. Interfund Receivables/Payables and Interfund Transactions Interfund receivables and payables within the governmental activities and business-type activities are eliminated for the government-wide financial statements at June 30, 2012. The following interfund receivables and payables are included in the fund financial statements at June 30, 2012:

General Valley MetroFund Rail Total

Due to other fundsGovernmental funds:

Transportation Demand Management 233,030$ -$ 233,030$ Total governmental funds 233,030 - 233,030

Enterprise funds:Transit Service Operations - 1,019,215 1,019,215

Total enterprise funds - 1,019,215 1,019,215 Grand totals 233,030$ 1,019,215$ 1,252,245$

Due fromother Funds

The interfund balances for the governmental funds at June 30, 2012 are short-term loans to cover temporary cash deficits in various funds. This occasionally occurs prior to grant and other reimbursements. The interfund balances within the business-type activities funds are amounts held in the Transit Service Operations Fund for debt service payments to be made by the Valley Metro Rail Fund and short-term loans to cover temporary cash deficits in pooled cash accounts. All interfund balances outstanding at June 30, 2012 are expected to be repaid within one year.


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Interfund transfers are primarily used for transfers of sales tax revenues from the General fund and the Public Transportation fund to the various funds that receive earmarked sales tax revenues. Interfund transfers between the enterprise funds are for transfers of bond proceeds for reimbursements of light rail capital expenditures. The following interfund transfers are reflected in the fund financial statements for the year ended June 30, 2012.

TransitGeneral Service Valley Metro

Fund Operations Rail TotalsTransfers InGovernmental funds:General 8,962,163$ -$ -$ 8,962,163$ Transit Planning 990,776 - - 990,776 Transit Demand Management 4,263 - - 4,263

Total governmental funds 9,957,202 - - 9,957,202

Enterprise funds:Transit Service Operations 69,855,456 - 5,054,482 74,909,938 Valley Metro Rail 38,608,634 10,360,738 - 48,969,372

Total enterprise funds 108,464,090 10,360,738 5,054,482 123,879,310 Grand totals 118,421,292$ 10,360,738$ 5,054,482$ 133,836,512$

Transfers Out

Net transfers from governmental activities to business-type activities on the government-wide statement of activities to the enterprise funds are in the amount $108,464,090.

6. Fund Balance Classifications Fund Balance classifications reported in the governmental funds include the following:


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7. Capital Assets A summary of capital asset activity, for the government-wide financial statements, for the year ended June 30, 2012:

Balances, Balances,July 01, 2011 Increases Decreases June 30, 2012

Governmental activities:Depreciable assets:

Site Improvements 430,572$ -$ -$ 430,572$ Computers & software 2,332,952 34,159 (50,315) 2,316,796 Equipment 767,146 240,421 (32,585) 974,982 Vehicles 134,911 - - 134,911 Furniture & fixtures 376,337 (20,494) 355,843

Total depreciable assets at historical cost 4,041,918 274,580 (103,394) 4,213,104

Less accumulated depreciation for:Site Improvements (46,071) (84,076) - (130,147) Computers & software (2,015,016) (164,537) 50,315 (2,129,238) Equipment (307,010) (126,283) 30,878 (402,415) Vehicles (134,914) - - (134,914) Furniture & fixtures (192,300) (45,457) 20,494 (217,263)

Total accumulated depreciation (2,695,311) (420,353) 101,687 (3,013,977)

Governmental activities capital assets, net 1,346,607$ (145,773)$ (1,707)$ 1,199,127$

Business-type activities:Non-depreciable assets:

Land 5,292,000$ -$ -$ 5,292,000$ Work in progress 2,719,141 689,907 (893,637) 2,515,411

Total non-depreciable assets 8,011,141 689,907 (893,637) 7,807,411

Depreciable assets:Transit fleet 103,911,625 2,916,802 (3,601,218) 103,227,209 Building 13,390,733 - - 13,390,733 Site improvements 8,046,479 640,279 - 8,686,758 Computers & software 271,461 - - 271,461 Equipment 7,000,464 14,509 - 7,014,973 Furniture & fixtures 127,037 - - 127,037

Total depreciable assets at historical cost 132,747,799 3,571,590 (3,601,218) 132,718,171

Less accumulated depreciation for:Transit fleet (41,500,644) (9,438,991) 3,422,847 (47,516,788) Building (873,309) (291,103) - (1,164,412) Site improvements (1,436,115) (482,554) - (1,918,669) Computers & software (170,829) (56,556) - (227,385) Equipment (3,387,096) (743,534) - (4,130,630) Furniture & fixtures (105,274) (13,090) - (118,364)

Total accumulated depreciation (47,473,267) (11,025,828) 3,422,847 (55,076,248)

Business-type activities capital assets, net 93,285,673$ (6,764,331)$ (1,072,008)$ 85,449,334$


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Depreciation expense was charged to the following functions in the basic financial statements:

Government- Business-Wide Type

Regional customer services 129,247$ -$ Administration 291,106 - Transit service operations - 11,025,828

Total depreciation expense 420,353$ 11,025,828$

The Authority’s enterprise funds in the business-type activities have entered into contracts having remaining construction commitments at June 30, 2012 totaling approximately $0.6 million. These commitments have not been recorded in the accompanying financial statements. Only the currently payable portions of these contracts have been included in the accounts payable in the accompanying financial statements.

8. Due to Other Governments

Payables to other governments primarily result from accrued member city billings for transportation services and lead agency disbursements for capital transportation projects which are funded by the Authority. Due to Other Governments at June 30, 2012 consist of the following:

Governmental ProprietaryFunds Funds Total

Due to Other Governments

City of Avondale -$ 136,088$ 136,088$ City of Chandler - 84,794 84,794 City of Mesa - 594,398 594,398 City of Phoenix 138,326 - 138,326 City of Scottsdale - 205,020 205,020 City of Surprise - 41,198 41,198 City of Tempe - 10,701,432 10,701,432 Gila River Indian Community - 18,124 18,124 Town of Buckeye - 5,110 5,110 Town of Gilbert - 45,694 45,694 Valley Metro Rail, Inc. - 2,720,228 2,720,228

Total Due to Other Governments 138,326$ 14,552,086$ 14,690,412$

Due toOther Governments By Fund Type


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9. Operating Leases The Authority leases office space under two separate lease agreements. Total rent expenditures were $955,258 for the fiscal year ended June 30, 2012. The future minimum lease payments under noncancelable and final option of the operating lease at June 30, 2012 were as follows:

June 30

2013 957,279$ 2014 1,037,334 2015 1,117,389 2016 1,141,992 2017 546,439

2018-2022 2,898,897 2023-2026 1,872,423

Total 9,571,753$

10. Long-Term Liabilities a. Transportation Excise Tax Revenue Bonds

In May 2009, the Board adopted the issuance of transportation revenue bonds, which are specifically for the purpose of payment or reimbursement of the costs of capital projects expenditures in the regional transportation plan. These bonds are payable solely from the revenues received by the Authority from the transportation excise tax revenues collected by the Arizona Department of Revenue. The bonds were issued on June 30, 2009 in two series. Series 2009A consisted of $73,795,000 transportation excise tax revenue bonds – tax exempt bonds and Series 2009B consisted of $26,280,000 transportation excise tax revenue bonds – federally taxable Build America Bonds. Annual installments of $2,265,000 to $9,260,000 will be made through 2025; interest ranges from 3.25 to 6.46 percent. The Authority has pledged future transportation excise tax revenues to repay a total of $100,075,000 in outstanding transportation revenue bonds. Proceeds of the bonds were used for improvements and expansions to the Authority’s bus and light rail projects. The bonds are payable solely from excise tax revenues and are payable through July 1, 2025. For the fiscal year ended June 30, 2012, the revenues available for service of this debt were $107,889,134 while total debt service requirements were $5,053,018 interest and $2,265,000 principal.


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Transportation Excise Revenue Bonds annual debt service requirements at June 30, 2012 were as follows:

Year EndingJune 30 Principal Interest Total

2013 5,085,000$ 5,053,018$ 10,138,018$ 2014 5,290,000 4,819,068 10,109,068 2015 5,555,000 4,547,943 10,102,943 2016 5,835,000 4,282,006 10,117,006 2017 6,085,000 4,007,593 10,092,593

2018-2022 35,215,000 15,111,715 50,326,715 2023-2026 34,745,000 4,420,798 39,165,798

Total 97,810,000$ 42,242,140$ 140,052,140$

.

Year EndingJune 30 Issuance Costs

Premium Amortization

2013 60,392$ 414,495$ 2014 60,392 414,495 2015 60,392 414,495 2016 60,392 414,495 2017 60,392 414,495

2018-2022 301,962 2,072,476 2023-2026 92,160 414,495

Total 696,083$ 4,559,446$

The revenue bonds liability activity for the fiscal year ended June 30, 2012 was as follows:

AmountBalance, Balance, Due Within

July 1, 2011 Additions Reductions June 30, 2012 One Year

Revenue bonds payable 100,075,000$ -$ (2,265,000)$ 97,810,000$ 5,085,000$ Plus: Bond premium 4,973,942 - (414,496) 4,559,446 -

Total 105,048,942$ -$ (2,679,496)$ 102,369,446$ 5,085,000$

b. Compensated Absences Compensated absences activity for the fiscal year ended June 30, 2012 is as follows:

AmountBalance, Balance, Due Within

July 1, 2011 Additions Reductions June 30, 2012 One Year

Compensated absences:Governmental activities 848,261$ 584,509$ (631,947)$ 800,823$ 582,109$ Business-type activities 881,263 667,837 (575,641) 973,459 571,031

1,729,524$ 1,252,346$ (1,207,588)$ 1,774,282$ 1,153,140$


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11. Risk Management The Authority is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. These risks are covered by commercial insurance purchased from independent third parties. The Authority purchases insurance coverage for property, general liability, automobile liability, umbrella liability, commercial crime, public entity employment practices liability, public entity management liability and excess liability. In addition, the Authority purchases workers’ compensation, employee life insurance and health and dental insurance coverage for all of its full-time employees. Settled claims for these risks have never exceeded commercial insurance limits and there were no significant changes in insurance coverage from the prior year. Insurance coverage for transit operations is carried by the contracted operators of service; the operators indemnify the Authority for all liability arising from transit operations.

12. Retirement and Pension Plans

a. Plan descriptions The Authority contributes to a cost-sharing, multiple-employer defined benefit pension plan; a cost-sharing multiple employer defined benefit health care plan; and a cost-sharing, multiple-employer defined benefit long-term disability plan, all of which are administered by the Arizona State Retirement System (ASRS). The ASRS (through its Retirement Fund) provides retirement (i.e., pension), death and survivor benefits; the Health Benefit Supplement Fund provides health insurance premium benefits (i.e., a monthly subsidy); and the Long-Term Disability Fund provides long-term disability benefits. Benefits are established by state statute. The System is governed by the Arizona State Retirement System Board according to the provisions of A.R.S. Title 38, Chapter 5, Article 2. The System issues a comprehensive annual financial report that includes financial statements and required supplementary information. The most recent report may be obtained by writing the System, 3300 North Central Avenue, P.O. Box 33910, Phoenix, Arizona 85067-3910 or by calling (602) 240-2000 or (800) 621-3778.

b. Funding policy The Arizona State Legislature establishes and may amend active plan members’ and the Authority’s contribution rates. For the current fiscal year, active ASRS members were required by statute to contribute at the actuarially determined rate of 10.74 percent (10.50 percent for retirement and 0.24 percent for long-term disability) of the members’ annual covered payroll and the Authority was required by statute to contribute at the actuarially determined rate of 10.74 percent (9.87 percent for retirement, 0.63 percent for health insurance premium, and 0.24 percent for long-term disability) of the members’ annual covered payroll.


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The Authority’s contributions for the current and two preceding years, all of which were equal to the required contributions, were as follows:

Health BenefitRetirement Supplement Long-Term

Fund Fund Disability FundYear ending June 30:

2012 1,260,530$ 83,182$ 30,713$ 2011 1,104,744 72,342 30,653 2010 1,053,332 83,357 50,520

13. Contractual and Other Commitments

a. Underground Storage Tank Revolving Fund Replenishment In fiscal year 1994, the Arizona State Legislature allocated $6,000,000 to the Authority from the Arizona Area A portion of the underground storage tank revolving fund. Beginning with the first fiscal year and in each subsequent fiscal year that the Authority is allocated at least $2,000,000 from the Lottery, the amount allocated to the Authority will be reduced by a maximum of $2,000,000 each fiscal year until a total of $6,000,000 has been withheld to replenish the underground storage tank revolving fund. In the event the Authority does not receive at least $2,000,000 from the Lottery in a given year, no amounts will be withheld from the respective year’s allocation. The Authority received a Lottery distribution of $1,760,759 in fiscal year 1998 which is the only year the Authority has received a Lottery distribution.

b. Commitments The Authority has entered into various contracts for the administration and operation of transit services, travel demand management services, and regional transit planning. Commitments under these contracts exist only to the extent that services are requested or provided, and all contracts provide for cancellation without cause. The outstanding commitments for FY 2012 were for the following projects: the Surprise Park-and-Ride, the Buckeye Park-and-Ride, and Bus Stop Improvements. At June 30, 2012, the Authority had outstanding contractual commitments for these services aggregating approximately $3.1 million. These commitments have not been recorded in the accompanying financial statements because the member cities either had not incurred the related expenses or had not requested reimbursement for the related expenses. Only the currently payable portions of these contracts have been included in accounts payable in the accompanying financial statements.

14. Contingencies As a sub-recipient of federal and state grant monies, amounts passed through or receivable from other agencies are subject to audit and adjustment by grantor agencies. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although the Authority expects such amounts, if any, to be immaterial.

Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Concluded) Fiscal Year Ended June 30, 2012

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15. Related Party Transactions As mentioned in Note 1 (a), the members of VMR’s Board of Directors are also members of the sixteen-member Authority’s Board of Directors. VMR contracts with the Authority for certain administrative functions, including personnel, administration, financial and accounting services, purchasing and computer support services. All VMR staff is hired and employed by the Authority but work solely under the direction of the VMR and its Board of Directors, through a contractual agreement with the Authority. For the period ended June 30, 2012, VMR paid $9,853,944 for services provided by the Authority. At June 30, 2012, the Authority reported $1,961,266 receivable from VMR and $2,720,228 payable to VMR.

Other Supplementary Information

Valley Metro Regional Public Transportation Authority Schedule of Revenues, Expenses and Changes in Net Assets – Budget to Actual Transit Service Operations Fund Fiscal Year Ended June 30, 2012

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Actual Variance withAmounts Final Budget

(budgetary OverOriginal Final basis) (Under)

Operating Revenues:Charges for services 19,506,262$ 18,274,607$ 15,857,726$ 2,416,881$ Miscellaneous 1,799,664 1,576,212 13,055 1,563,157

Total operating revenues 21,305,926 19,850,819 15,870,781 3,980,038

Operating Expenses:Local & express bus service 45,851,933 46,780,085 42,237,399 (4,542,686) Paratransit service 23,470,799 23,602,503 10,863,296 (12,739,207) Vanpool service 774,242 789,389 749,235 (40,154) Safety and security 553,000 553,000 308,911 (244,089) Administrative and general 21,050 21,050 121,806 100,756 Contingency 941,012 941,012 - (941,012) Capital outlay - - 3,367,860 3,367,860

Total operating expenses 71,612,037 72,687,039 57,648,507 (15,038,532) Operating income (loss) (50,306,111) (52,836,220) (41,777,726) 11,058,494

Non-Operating Revenues (Expenses):Lead agency disbursements - - (14,671,568) (14,671,568) IRS fuel tax credit 1,175,000 825,000 512,860 (312,140) Interest income - - 79,323 79,323 Proceeds from disposition of capital assets 110,000 40,000 - (40,000) AZ Lottery Proceeds (Disbursements) - 271,281 262,989 (8,292) Capital conveyence - - (28,368,147) (28,368,147) Interest subsidy - - 589,923 589,923 Debt Service 10,239,718 10,239,718 (4,745,395) (14,985,113) Bond issuance expense - - (60,392) (60,392)

Total nonoperating revenues (expenses) 11,524,718 11,375,999 (46,400,407) (57,776,406) Income (loss) before transfers (38,781,393) (41,460,221) (88,178,133) (46,717,912)

Capital Contributions 53,524,958 31,372,058 31,347,333 (24,725) Transfers in 69,691,835 57,023,768 74,909,938 17,886,170 Transfers out (74,195,682) (36,695,887) (10,360,738) 26,335,149

Change in net assetsbudgetary basis 10,239,718$ 10,239,718$ 7,718,400$ (2,521,318)$

Explanation of differences between budgetary basis and GAAP basisExcess revenues over expenses - budgetary basis 7,718,400$ Capital outlay is an expense for budgetary purposes, but assets are capitalized and are not an expense for GAAP purposes 3,367,860 Depreciation is not a budgeted expense, but is an expense for GAAP purposes (11,025,829) Proceeds from disposition of assets increase financial resources for budgetary basis, but is not a revenue for GAAP basis 31,755 Changes in net assets per the statement of revenues, expenses and changes in fund net assets 92,186$

Budgeted Amounts

.

Valley Metro Regional Public Transportation Authority Schedule of Revenues, Expenses and Changes in Net Assets – Budget to Actual Valley Metro Rail Fund Fiscal Year Ended June 30, 2012

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Operating Revenues:Charges for services 8,965,065$ 10,925,028$ 9,701,059$ 1,223,969$ Miscellaneous - - 3,531 (3,531)

Total operating revenues 8,965,065 10,925,028 9,704,590 1,220,438

Operating Expenses:Light rail staff and administration 8,965,065 10,925,028 9,546,161 1,378,867

Total operating expenses 8,965,065 10,925,028 9,546,161 1,378,867 Operating income (loss) - - 158,429 (158,429)

Non-Operating Revenues (Expenses):Lead agency disbursements (39,846,471) (39,846,471) (24,119,048) 15,727,423 Interest income - - 30,476 30,476

Total nonoperating revenues (expenses) (39,846,471) (39,846,471) (24,088,572) 15,757,899

Income (loss) before transfers (39,846,471) (39,846,471) (23,930,143) 15,916,328

Transfers in 54,950,471 54,950,471 48,969,372 (5,981,099) Transfers out (15,104,000) (15,104,000) (5,054,482) 10,049,518

Change in net assets - budgetary basis -$ -$ 19,984,747$ 19,984,747$

Budgeted Amounts

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Statistical Section The Statistical Section includes selected financial and demographic information regarding the Authority.

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Statistical Section

The Statistical Section presents detailed information as a context for understanding what the information in the financial statements, note disclosures and required supplementary information says about the Authority’s overall financial health. Financial Trends

These schedules contain trend information to help the reader understand how the Authority’s financial performance and well-being have changed over time.

Revenue Capacity These schedules contain information to help the reader assess the Authority’s most significant local revenue source, the sales tax.

Debt Capacity These schedules contain information to help the reader assess the affordability of the Authority’s current levels of outstanding debt, the Authority’s ability to issue additional debt in the future. There is no statute on the Authority’s debt limit on the issuance of bonds. The only limitation is the ability to secure the debts with available excise tax monies.

Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the Authority’s financial activities take place.

Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the Authority’s financial report relates to the services the Authority provides and the activities it performs.

Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year.

Valley Metro Regional Public Transportation Authority Net Assets By Component Last Ten Fiscal Years (accrual basis of accounting)

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FY 2002/03 FY 2003/04 FY 2004/05 FY 2005/06

Governmental activitiesInvested in capital assets,net of related debt 175,418$ 199,619$ 161,090$ 249,177$ Restricted - - - - Unrestricted 2,303,561 3,300,859 3,300,859 12,224,193

Total governmental activities net asset 2,478,979$ 3,500,478$ 3,461,949$ 12,473,370$

Business-type activitiesInvested in capital assets,net of related debt 14,186,807$ 11,497,494$ 12,283,769$ 27,042,048$ Restricted 1,116,356 1,559,108 1,827,192 5,301,289 Unrestricted 943,423 1,250,277 1,299,780 17,159,298

Total business-type activities net assets 16,246,586$ 14,306,879$ 15,410,741$ 49,502,635$

Primary governmentInvested in capital assets,net of related debt 14,362,225$ 11,697,113$ 12,444,859$ 27,291,225$ Restricted 1,116,356 1,559,108 1,827,192 5,301,289 Unrestricted 3,246,984 4,551,136 4,600,639 29,383,491

Total primary government net assets 18,725,565$ 17,807,357$ 18,872,690$ 61,976,005$

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FY 2006/07 FY 2007/08 FY 2008/09 FY 2009/10 FY 2010/11 FY 2011/12

1,362,413$ 1,467,040$ 1,229,916$ 689,786$ 1,346,607$ 1,199,127$ - - - - 178,382 188,792

42,677,444 28,106,773 37,265,160 45,287,115 51,323,184 46,388,453 44,039,857$ 29,573,813$ 38,495,076$ 45,976,901$ 52,848,173$ 47,776,372$

47,945,807$ 72,537,461$ 98,580,060$ 106,601,704$ 21,322,728$ 6,528,635$ 1,778,889 2,332,524 4,062,157 - - 120,650

21,142,003 17,991,644 (9,329,497) (36,226,944) 16,410,223 51,160,599 70,866,699$ 92,861,629$ 93,312,720$ 70,374,760$ 37,732,951$ 57,809,884$

49,308,220$ 74,004,501$ 99,809,976$ 107,291,490$ 22,669,335$ 7,727,762$ 1,778,889 2,332,524 4,062,157 - 178,382 309,442

63,819,447 46,098,417 27,935,663 9,060,171 67,733,407 97,549,052 114,906,556$ 122,435,442$ 131,807,796$ 116,351,661$ 90,581,124$ 105,586,256$

Valley Metro Regional Public Transportation Authority Changes in Net Assets Last Ten Fiscal Years (accrual basis of accounting)

56

FY 2002/03 FY 2003/04 FY 2004/05 FY 2005/06ExpensesGovernmental activities:

Regional planning:Long range 367,279$ 167,057$ 162,287$ 187,496$ Short range 274,302 242,945 145,690 322,430 Capital 118,161 163,818 236,219 197,256 Program support 43,722 53,199 171,169 534,285

Transportation demand management:Trip reduction 820,699 784,056 931,196 865,290 Ridesharing 589,798 656,311 514,977 645,052 Other programs 294,016 267,869 486,102 326,903

Regional customer services:Marketing - - - - Call center - - - - Other programs - - - -

AZ Lottery Fund Disbursements - - - - Administration: 226,215 238,134 400,777 514,158

Executive director’s office 207,283 247,948 161,979 207,304 Communications & government relations 91,684 106,305 293,648 549,635 Finance & management services 51,652 51,652 51,652 -

Community funded transportation 94,589 90,972 180,099 - Capital outlay 3,179,400 3,070,266 3,735,795 4,349,809

Total governmental activities expenses

Business-type activities: 30,011,849 30,650,723 34,834,292 38,578,007 Transit service operations 4,229,972 4,710,645 5,123,118 5,767,760 Regional customer services 5,033,179 2,982,701 3,667,400 16,909,968 Light rail transit 39,275,000 38,344,069 43,624,810 61,255,735

Total business-type activities expenses42,454,400$ 41,414,335$ 47,360,605$ 65,605,544$

Total primary government expenses

57

FY 2006/07 FY 2007/08 FY 2008/09 FY 2009/10 FY 2010/11 FY 2011/12

403,337$ 316,147$ 292,509$ 308,339$ 101,121$ 161,945$ 558,664 735,888 317,886 358,149 1,063,291 307,283 164,722 224,767 154,523 106,185 113,073 113,311

1,298,591 1,113,474 1,183,750 1,049,353 997,203 704,870

719,854 819,553 897,234 1,052,649 909,742 779,921 594,549 592,460 561,620 504,614 590,062 571,187 385,257 373,833 424,091 250,976 42,633 40,145

2,578,094 3,110,366 2,810,408 2,585,192 2,201,863 2,018,631 3,087,948 3,599,018 3,807,893 3,896,440 3,833,319 3,578,569 1,623,744 1,857,934 2,129,063 2,015,543 1,960,196 2,447,288

- - - - - 10,345,984 1,712,451 1,033,066 1,111,340 1,128,667 1,284,141 992,735

- - - - - 260,965 908,275 799,503 750,461 682,197 827,759 715,001 - - - -

- - - - - 14,103,177 14,684,781 14,489,820 14,006,568 13,778,841 22,889,628

60,090,164 96,796,902 99,625,805 93,074,466 90,336,819 113,091,586 - - - - - -

63,225,727 65,243,366 70,492,629 60,704,307 66,140,185 33,665,209 123,315,891 162,040,268 170,118,434 153,778,773 156,477,004 146,756,795

137,419,068$ 176,725,049$ 184,608,254$ 167,785,341$ 170,255,845$ 169,646,423$

Valley Metro Regional Public Transportation Authority Changes in Net Assets (Continued) Last Ten Fiscal Years (accrual basis of accounting)

58

FY 2002/03 FY 2003/04 FY 2004/05 FY 2005/06Program revenuesGovernmental activities:

Charges for services 3,370$ 32,501$ 49,642$ 75,295$ Operating grants and contributions 2,259,396 1,949,879 2,288,916 2,358,485 Capital grants and contributions 94,488 92,140 172,438 48,382

Total governmental activities program revenues 2,357,254 2,074,520 2,510,996 2,482,162

Business-type activities:Charges for services

Transit service operations:Local & express bus service 14,423,963 15,487,044 18,135,892 18,963,733 Paratransit service 4,623,029 4,640,901 5,344,925 4,075,963 Vanpool service 594,796 534,764 526,891 692,342 Other activities 56,957 70,001 49,550 182,809

Regional customer services 3,997,064 4,378,852 4,962,128 3,376,143 Light rail transit 2,569,035 2,982,701 3,667,400 5,209,939

Operating grants and contributions 4,108,637 1,834,067 5,140,813 1,186,038 Capital grants and contributions 609,542 820,223 387,845 17,286,134

Total business-type activities program revenues 30,983,023 30,748,553 38,215,444 50,973,101 Total primary government program revenues 33,340,277$ 32,823,073$ 40,726,440$ 53,455,263$

Net (Expense)/RevenueGovernmental activities (822,146)$ (995,746)$ (1,224,799)$ (1,867,647)$ Business-type activities (8,291,977) (7,595,516) (5,409,366) (10,282,634)

Total primary government net expense (9,114,123)$ (8,591,262)$ (6,634,165)$ (12,150,281)$

General Revenues and Other Changes in Net Assets

Governmental activities:Sales taxes 2,587,302$ 3,071,725$ 1,154,022$ 55,084,706$ Interest earnings 64,528 83,977 103,981 124,312 Other income 21,603 966 1,047 - Transfers in (out) (1,828,543) (1,139,423) - (44,329,950)

Total governmental activities 844,890 2,017,245 1,259,050 10,879,068

Business-type activities:Sales taxes 4,914,755 4,516,066 6,559,344 - Interest earnings 22,702 320 2,774 44,578 Other income - - - - Transfers in (out) 1,828,543 1,139,423 - 44,329,950

Total business-type activities: 6,766,000 5,655,809 6,562,118 44,374,528 Total primary government 7,610,890$ 7,673,054$ 7,821,168$ 55,253,596$

Change in net assets:Governmental activities 22,744$ 1,021,499$ 34,251$ 9,011,421$ Business-type activities (1,525,977) (1,939,707) 1,152,752 34,091,894

Total primary government net expense (1,503,233)$ (918,208)$ 1,187,003$ 43,103,315$

59

FY 2006/07 FY 2007/08 FY 2008/09 FY 2009/10 FY 2010/11 FY 2011/12

25,046$ -$ -$ 150,353$ 189,000$ 153,445$ 2,494,611 2,062,602 2,632,463 2,055,931 2,286,930 13,601,884

198,777 - - - -

2,718,434 2,062,602 2,632,463 2,206,284 2,475,930 13,755,329

20,131,861 19,861,844 19,936,194 15,849,887 9,811,268 10,256,090 2,118,843 2,043,104 3,029,151 2,408,268 2,431,467 2,637,827

685,743 844,115 926,245 864,663 318,945 181,929 36,729 - - - 2,611,481 2,781,880

- - - - - - 5,565,540 6,421,524 8,614,280 8,130,261 8,201,600 9,701,059

642,313 1,421,891 2,609,156 2,607,770 2,144,496 1,337,135 19,041,093 16,237,008 40,555,599 14,996,556 8,289,329 31,347,333

48,222,122 46,829,486 75,670,625 44,857,405 33,808,586 58,243,253

50,940,556$ 48,892,088$ 78,303,088$ 47,063,689$ 36,284,516$ 71,998,582$

(11,384,743)$ (12,622,179)$ (11,857,357)$ (11,800,284)$ (11,302,911)$ (9,134,299)$ (75,093,769) (115,210,782) (94,447,809) (108,921,368) (122,668,418) (88,513,542) (86,478,512)$ (127,832,961)$ (106,305,166)$ (120,721,652)$ (133,971,329)$ (97,647,841)$

134,235,260$ 130,490,779$ 113,297,696$ 103,722,510$ 107,111,118$ 112,353,330$ 1,664,357 2,503,935 36,310 231,398 79,874 73,104

- 142,810 75,176 73,531 233,357 100,154 (92,948,387) (134,981,389) (92,630,562) (84,745,330) (89,250,166) (108,464,090) 42,951,230 (1,843,865) 20,778,620 19,282,109 18,174,183 4,062,498

- - - - - - 945,155 536,116 34,862 587,487 215,800 109,799

2,564,291 1,688,207 2,233,476 650,591 560,643 16,586 92,948,387 134,981,389 92,630,562 84,745,330 89,250,166 108,464,090 96,457,833 137,205,712 94,898,900 85,983,408 90,026,609 108,590,475

139,409,063$ 135,361,847$ 115,677,520$ 105,265,517$ 108,200,792$ 112,652,973$

31,566,487$ (14,466,044)$ 8,921,263$ 7,481,825$ 6,871,272$ (5,071,801)$ 21,364,064 21,994,930 451,091 (22,937,960) (32,641,809) 20,076,933 52,930,551$ 7,528,886$ 9,372,354$ (15,456,135)$ (25,770,537)$ 15,005,132$

Valley Metro Regional Public Transportation Authority Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting)

60

FY 2002/03 FY 2003/04 FY 2004/05 FY 2005/06General fund:

Reserved -$ -$ -$ -$ Unreserved, designated 318,191 384,887 350,173 649,225 Unreserved, undesignated 1,985,370 2,915,972 2,950,686 1,638,892 Nonspendable:

Prepaid ItemsUnassigned

Total general fund 2,303,561$ 3,300,859$ 3,300,859$ 2,288,117$

All other governmental funds:Reserved -$ -$ -$ -$ Unreserved, designated, reported in special revenue funds - - - - Unreserved, undesignated, reported in - special revenue funds - - - 9,936,076 Nonspendable:

Prepaid ItemsRestricted

Total all other governmental funds -$ -$ -$ 9,936,076$ Note: 2011 was the first year the Authority implemented GASB Statement No. 54.

61

FY 2006/07 FY 2007/08 FY 2008/09 FY 2009/10 FY 2010/11 FY 2011/12

-$ -$ -$ -$ -$ -$ 1,002,229 233,480 755,184 837,880 - - 1,433,788 2,888,105 2,882,500 3,852,887 - -

6,797 10,554 52,164,648 47,178,722

2,436,017$ 3,121,585$ 3,637,684$ 4,690,767$ 52,171,445$ 47,189,276$

-$ -$ -$ -$ -$ -$

- - - - - - 21,059,001 410,974 - - - - 19,182,426 25,218,669 34,382,659 41,434,228 - -

3,372 - 175,010 188,792

40,241,427$ 25,629,643$ 34,382,659$ 41,434,228$ 178,382$ 188,792$

Valley Metro Regional Public Transportation Authority Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting)

62

FY 2002/03 FY 2003/04 FY 2004/05 FY 2005/06RevenuesSales taxes 2,587,302$ 3,071,725$ 1,154,022$ 55,084,706$ Intergovernmental:

AZ Lottery Proceeds - - - - State & county grants & pass through grants 400,000 400,000 400,000 400,000 Federal Transit Administration 599,460 335,365 526,176 569,622 CMAQ 1,312,424 1,264,654 1,493,178 1,395,577 Other federal grants 42,000 42,000 42,000 41,668

Charges for services 3,370 32,501 49,642 75,295 Interest earnings 64,528 83,977 103,981 124,312 Miscellaneous 21,603 966 1,047 -

Total revenues 5,030,687 5,231,188 3,770,046 57,691,180

ExpendituresGovernmental activities:

Regional planning: Long range 367,279$ 167,057$ 162,287$ 187,496$ Short range 274,302 242,945 145,690 322,430 Capital 118,161 163,818 236,219 197,256 Program support 43,722 53,199 171,169 534,285

Transportation demand management:Trip reduction 820,699 784,056 931,196 865,290 Ridesharing 589,798 656,311 514,977 645,052 Other programs 294,016 267,869 486,102 326,903

Regional customer services: Marketing - - - - Call center - - - - Other programs - - - -

Administration: Executive director’s office 226,215 238,134 400,777 514,158 Communications & government relations 207,283 247,948 161,979 207,304 Finance & management services 91,684 106,305 293,648 419,571

Community funded transportation 51,652 51,652 51,652 - AZ Lottery Fund Expenditures - - - - Capital outlay 117,333 115,173 214,350 218,151

Total expenditures 3,202,144 3,094,467 3,770,046 4,437,896

Excess of revenues over expenditures 1,828,543 2,136,721 - 53,253,284

Other financing sources (uses) Transfers in - - - 814,701 Transfers out (1,828,543) (1,139,423) - (45,144,651)

Total other financing sources (uses) (1,828,543) (1,139,423) - (44,329,950)

Net change in fund balances -$ 997,298$ -$ 8,923,334$

63

FY 2006/07 FY 2007/08 FY 2008/09 FY 2009/010 FY 2010/011 FY 2011/012

134,235,260$ 130,490,779$ 113,297,696$ 103,722,510$ 107,111,118$ 112,353,330$

- - - - - 11,665,674 400,000 422,887 455,671 688,659 635,647 400,200 993,727 268,661 612,190 266,015 799,840 589,367

1,298,056 1,287,054 1,411,497 1,101,257 851,443 946,643 1,604 84,000 - - - -

25,046 - - - 189,000 153,445 1,664,357 2,503,935 36,310 231,398 79,874 73,104

- 144,672 228,281 223,988 233,357 100,154 138,618,050 135,201,988 116,041,645 106,233,827 109,900,279 126,281,917

403,337$ 311,129$ 292,509$ 308,339$ 101,121$ 161,939$ 558,664 733,017 317,886 358,149 1,063,291 307,283 164,722 222,439 154,523 106,185 113,073 113,311

1,298,591 1,104,198 1,183,750 1,049,353 997,203 704,870

719,854 816,128 897,234 1,052,649 909,742 779,921 594,549 601,220 561,620 504,614 590,062 571,187 385,257 370,142 424,091 250,976 42,633 40,142

2,578,094 3,084,872 2,810,408 2,585,192 2,201,863 2,018,631 3,087,948 3,563,629 3,807,893 3,896,440 3,833,319 3,578,569 1,511,164 1,380,563 1,733,413 1,662,194 1,815,740 2,447,288

1,712,451 1,030,804 1,111,340 1,128,667 1,284,141 992,744

260,965 - - - - - 580,415 318,945 462,737 419,178 359,637 453,137

- - - - - - - - - - - 10,345,984

765,641 1,078,709 384,564 61,909 1,113,456 274,580 14,621,652 14,615,795 14,141,968 13,383,845 14,425,281 22,789,586

123,996,398 120,586,193 101,899,677 92,849,982 95,474,998 103,492,331

9,349,388 11,165,777 9,975,889 9,658,964 1,447,579 9,957,202 (102,892,535) (146,147,166) (102,606,451) (94,404,294) (90,697,745) (118,421,292)

(93,543,147) (134,981,389) (92,630,562) (84,745,330) (89,250,166) (108,464,090)

30,453,251$ (14,395,196)$ 9,269,115$ 8,104,652$ 6,224,832$ (4,971,759)$

Valley Metro Regional Public Transportation Authority Sales Tax Revenues by Component Last Ten Fiscal Years (accrual basis of accounting)

64

FY 2002/03 FY 2003/04 FY 2004/05 FY 2005/06 (1)

Governmental activitiesRegional area road funds 2,587,302$ 3,071,725$ 1,154,022$ 3,938,570$ Public transportation funds - - - 51,146,136

Total governmental activities sales taxes 2,587,302$ 3,071,725$ 1,154,022$ 55,084,706$

Business-type activitiesRegional area road funds 4,914,755$ 4,516,066$ 6,559,344$ -$ Public transportation funds - - - -

Total business-type activities sales taxes 4,914,755$ 4,516,066$ 6,559,344$ -$

Primary governmentRegional area road funds 7,502,057$ 7,587,791$ 7,713,366$ 3,938,570$ Public transportation funds - - - 51,146,136

Total primary government sales taxes 7,502,057$ 7,587,791$ 7,713,366$ 55,084,706$

(1) With the implementation of the Public Transportation sales tax in January 2006, several changes to sales tax distributions were made. The regional area road fund sales tax distribution was reduced to one-half of the amount distributed in prior years. The collections of sales taxes under the new statute are distributed 33.3% to the Authority on a monthly basis. During FY 2005/06, only six months of collections of the Public Transportation sales tax were reported.

65

FY 2006/07 (1) FY 2007/08 (1) FY 2008/09 (1) FY 2009/10 (1) FY 2010/11 (1) FY 2011/12 (1)

4,047,593$ 4,167,168$ 4,277,292$ 4,371,192$ 4,422,559$ 4,464,196$ 130,187,667 126,323,611 109,020,404 99,351,318 102,688,559 107,889,134 134,235,260$ 130,490,779$ 113,297,696$ 103,722,510$ 107,111,118$ 112,353,330$

-$ -$ -$ -$ -$ -$ - - - - - - -$ -$ -$ -$ -$ -$

4,047,593$ 4,167,168$ 4,277,292$ 4,371,192$ 4,422,559$ 4,464,196$ 130,187,667 126,323,611 109,020,404 99,351,318 102,688,559 107,889,134 134,235,260$ 130,490,779$ 113,297,696$ 103,722,510$ 107,111,118$ 112,353,330$

Valley Metro Regional Public Transportation Authority Maricopa County Transportation Excise Tax Revenue Distributions Last Ten Fiscal Years (in thousands)

66

FY 2002/03 FY 2003/04 FY 2004/05 FY 2005/06 (2)

Regional area road fundsFreeways 261,219$ 281,012$ 309,092$ 292,487$ Regional Public Transportation Authority / Maricopa Association 7,502 7,588 7,713 7,877 of Governments (1)Arterial streets - - - 16,127

Total regional area road fund distributions 268,721 288,600 316,805 316,491

Public transportation funds - - - 51,146

Total Maricopa County transportation excise tax revenue distributions 268,721$ 288,600$ 316,805$ 367,637$

Source: The Maricopa County Transportation Excise Tax Year-End Report prepared by the Arizona Department of

Transportation, Financial Management Services, Office of Financial Planning. Note: The Maricopa County Transportation Excise Tax, often referred to as the “1/2 cent sales tax,” is levied upon

business activities in Maricopa County, including retail sales, contracting, utilities, rental of real and personal property, restaurant and bar receipts, and other activities. Under Proposition 300 (passed by the voters in 1985 becoming effective on January 1, 1986), the transportation excise tax revenues are deposited in the Maricopa County Regional Area Road Fund (RARF) which is administered by the Arizona Department of Transportation. The revenues deposited into the RARF account are the principal sources of funding for the Regional Freeway System in Maricopa County and the Regional Public Transportation Authority and are dedicated through December 31, 2005. In November 2004, Maricopa County’s voters approved Proposition 400, Maricopa County Transportation Excise Tax, which became effective on January 1, 2006, and extends the 1/2 cent sales tax for another 20 years through December 31, 2025. The sales tax extension will be used for construction of new freeways, widening of existing freeways and highways, improvements to the arterial street system, regional bus service and high-capacity transit services such as light rail. The collections of the Maricopa County Transportation Excise Tax are as follows: Freeways 56.2%, Public Transportation Fund 33.3%, and Arterial Streets 10.5%.

(1) The Authority received a portion of the RARF excise tax funds for transit costs through December 31, 2005.

On January 1, 2006 these funds are distributed evenly to the Authority and the Maricopa Association of Governments to be used for administrative and planning purposes per Proposition 400. These funds are netted from the Freeway funds.

(2) Distributions are a mix of both Proposition 300 and Proposition 400 collections.

67

FY 2006/07 (2) FY 2007/08 FY 2008/09 FY 2009/10 FY 2010/11 FY 2011/12

213,119$ 205,576$ 176,235$ 159,604$ 165,321$ 173,334$

8,095 8,334 8,555 8,742 8,845 8,928

41,050 39,832 34,376 31,327 32,379 34,019 262,264 253,742 219,166 199,673 206,545 216,281

130,188 126,324 109,020 99,351 102,689 107,889

392,452$ 380,066$ 328,186$ 299,024$ 309,234$ 324,170$

Valley Metro Regional Public Transportation Authority Maricopa County Transportation Excise Tax Revenue Collections by Category Last Ten Fiscal Years (in thousands)

68

Rental Fiscal Retail Restaurant Rental Real Personal Year Sales Contracting Utilities and Bar Property Property Other Total

2002/03 133,922 38,894 18,485 22,646 25,747 12,834 16,193 268,721 2003/04 144,817 43,524 19,980 24,807 27,163 12,631 15,678 288,600 2004/05 158,179 52,325 20,813 27,191 29,310 12,624 16,363 316,805 2005/06 (1) 182,378 64,822 23,600 30,656 32,949 13,923 19,309 367,637 2006/07 (1) 187,817 73,864 26,697 33,073 36,398 15,053 19,550 392,452 2007/08 (1) 177,845 66,046 28,630 33,021 38,605 15,111 20,808 380,066 2008/09 (1) 153,681 46,865 28,510 30,763 37,757 13,470 17,140 328,186 2009/10 (1) 143,205 28,953 29,385 30,558 35,825 11,983 19,115 299,024 2010/11 (1) 152,003 28,012 29,511 31,729 35,731 11,606 20,643 309,235 2011/12 (1) 162,391 30,513 30,217 34,279 36,415 11,966 18,389 324,170 Source: The Maricopa County Transportation Excise Tax Year-End Report, prepared by the Arizona Department of

Transportation, Financial Management Services, Office of Financial Planning. Note: The Maricopa County Transportation Excise Tax, often referred to as the “1/2 cent sales tax,” is levied upon business

activities in Maricopa County, including retail sales, contracting, utilities, rental of real and personal property, restaurant and bar receipts, and other activities. Under Proposition 300 (passed by the voters in 1985 becoming effective on January 1, 1986), the transportation excise tax revenues are deposited in the Maricopa County Regional Area Road Fund (RARF) which is administered by the Arizona Department of Transportation. The revenues deposited into the RARF account are the principal sources of funding for the Regional Freeway System in Maricopa County and the Regional Public Transportation Authority and are dedicated through December 31, 2005. In November 2004, Maricopa County’s voters approved Proposition 400, Maricopa County Transportation Excise Tax, which became effective on January 1, 2006, and extends the 1/2 cent sales tax for another 20 years through December 31, 2025. The sales tax extension will be used for construction of new freeways, widening of existing freeways and highways, improvements to the arterial street system, regional bus service and high-capacity transit services such as light rail. The collections of the Maricopa County Transportation Excise Tax are as follows: Freeways 56.2%, Public Transportation Fund 33.3%, and Arterial Streets 10.5%.

Note: Information for individual taxpayers is confidential, and state statutes prohibit releasing the information. (1) Fiscal year collections are a mix of both Proposition 300 and Proposition 400 collections. Revenue Category Definitions: Retail Sales Includes retail sales of automobiles, durable goods and other general merchandise, apparel,

building materials, furniture and other tangible personal property. The tax on food was repealed in July 1980.

Contracting Includes prime contracting and dealership of manufactured buildings and owner-builder

operations. Utilities Includes producing and/or furnishing to consumers electricity, natural or artificial gas, and water. Restaurant and Bar Includes operations of restaurants and drinking establishments. Rental of Real Property

Includes leasing or renting real property, hotels and motels.

Rental of Personal Property

Includes leasing or renting tangible personal property such as leased vehicles and construction equipment.

Other Includes intrastate transportation of persons, freight or operations of property, intrastate

telecommunication services, intrastate operation of pipelines for oil or natural or artificial gas, job printing, engraving, embossing and publication, publication of newspapers, magazines and other periodicals, operations of amusement places and miscellaneous other revenues.

Valley Metro Regional Public Transportation Authority Arizona Transaction Privilege Tax Excise Tax Rates by Category Last Ten Fiscal Years

69

FY 2002/03 FY 2003/04 FY 2004/05 FY 2005/06 FY 2006/07

Retail salesPercent of Total Maricopa County Transaction Privilege Tax Collections 49.8400% 50.1800% 49.9300% 49.9300% 47.8600%Transaction Privilege Tax Rate 5.0000% 5.0000% 5.0000% 5.0000% 5.0000%Transportation Excise Tax Rate 0.5000% 0.5000% 0.5000% 0.5000% 0.5000%

ContractingPercent of Total Maricopa County Transaction Privilege Tax Collections 14.4700% 15.0800% 16.5200% 16.5200% 18.8200%Transaction Privilege Tax Rate 5.0000% 5.0000% 5.0000% 5.0000% 5.0000%Transportation Excise Tax Rate 0.5000% 0.5000% 0.5000% 0.5000% 0.5000%

Rental of Real Property (including hotels and motels) (1) Percent of Total Maricopa County Transaction Privilege Tax Collections 9.5800% 9.0500% 9.2500% 9.2500% 9.2700%Transaction Privilege Tax Rate 1.8200% 1.8200% 1.8200% 1.8200% 1.8200%Transportation Excise Tax Rate 0.5120% 0.5120% 0.5120% 0.5120% 0.5120%

Restaurants and BarsPercent of Total Maricopa County Transaction Privilege Tax Collections 8.4300% 8.6000% 8.5800% 8.5800% 8.4300%Transaction Privilege Tax Rate 5.0000% 5.0000% 5.0000% 5.0000% 5.0000%Transportation Excise Tax Rate 0.5000% 0.5000% 0.5000% 0.5000% 0.5000%

UtilitiesPercent of Total Maricopa County Transaction Privilege Tax Collections 6.8800% 6.9200% 6.5700% 6.5700% 6.8000%Transaction Privilege Tax Rate 5.0000% 5.0000% 5.0000% 5.0000% 5.0000%Transportation Excise Tax Rate 0.5000% 0.5000% 0.5000% 0.5000% 0.5000%

Rental of Personal PropertyPercent of Total Maricopa County Transaction Privilege Tax Collections 4.7800% 4.3800% 3.9800% 3.9800% 3.8400%Transaction Privilege Tax Rate 5.0000% 5.0000% 5.0000% 5.0000% 5.0000%Transportation Excise Tax Rate 0.5000% 0.5000% 0.5000% 0.5000% 0.5000%

CommunicationsPercent of Total Maricopa County Transaction Privilege Tax Collections 3.4500% 3.3400% 3.2000% 3.2000% 2.9300%Transaction Privilege Tax Rate 5.0000% 5.0000% 5.0000% 5.0000% 5.0000%Transportation Excise Tax Rate 0.5000% 0.5000% 0.5000% 0.5000% 0.5000%

AmusementsPercent of Total Maricopa County Transaction Privilege Tax Collections 1.1100% 1.0600% 1.0500% 1.0500% 1.0600%Transaction Privilege Tax Rate 5.0000% 5.0000% 5.0000% 5.0000% 5.0000%Transportation Excise Tax Rate 0.5000% 0.5000% 0.5000% 0.5000% 0.5000%

Publishing and PrintingPercent of Total Maricopa County Transaction Privilege Tax Collections 0.7000% 0.6300% 0.6100% 0.6100% 0.5300%Transaction Privilege Tax Rate 5.0000% 5.0000% 5.0000% 5.0000% 5.0000%Transportation Excise Tax Rate 0.5000% 0.5000% 0.5000% 0.5000% 0.5000%

OtherPercent of Total Maricopa County Transaction Privilege Tax Collections 0.7600% 0.7600% 0.3100% 0.3100% 0.4600%Transaction Privilege Tax Rate 5.0000% 5.0000% 5.0000% 5.0000% 5.0000%Transportation Excise Tax Rate 0.5000% 0.5000% 0.5000% 0.5000% 0.5000%

MiningPercent of Total Maricopa County Transaction Privilege Tax Collections 0.0000% 0.0000% 0.0000% 0.0000% 0.0000%Transaction Privilege Tax Rate 3.1250% 3.1250% 3.1250% 3.1250% 3.1250%Transportation Excise Tax Rate 0.3125% 0.3125% 0.3125% 0.3125% 0.3125%

Source: The Maricopa County Transportation Excise Tax Year-End Report for the applicable fiscal year prepared by the

Arizona Department of Transportation, Financial Management Services, Office of Financial Planning. (1) In 1990 and 1993, legislation reduced the transaction privilege tax rate for real property rentals; however, for

transportation excise tax purposes, the rate was retained at its prior level.

70

FY 2007/08 FY 2008/09 FY 2009/10 FY 2010/11 FY 2011/12

46.8000% 46.8300% 46.8300% 49.1600% 50.1000%5.0000% 5.0000% 5.0000% 5.0000% 5.0000%0.5000% 0.5000% 0.5000% 0.5000% 0.5000%

17.4000% 14.2800% 14.2800% 9.0600% 9.4000%5.0000% 5.0000% 5.0000% 5.0000% 5.0000%0.5000% 0.5000% 0.5000% 0.5000% 0.5000%

10.1000% 11.5000% 11.5000% 11.5500% 11.2000%1.8200% 1.8200% 1.8200% 1.8200% 1.8200%0.5120% 0.5120% 0.5120% 0.5120% 0.5120%

8.7000% 9.3700% 9.3700% 10.2600% 10.6000%5.0000% 5.0000% 5.0000% 5.0000% 5.0000%0.5000% 0.5000% 0.5000% 0.5000% 0.5000%

7.5000% 8.6900% 8.6900% 9.5400% 9.3000%5.0000% 5.0000% 5.0000% 5.0000% 5.0000%0.5000% 0.5000% 0.5000% 0.5000% 0.5000%

4.0000% 4.1000% 4.1000% 3.7500% 3.7000%5.0000% 5.0000% 5.0000% 5.0000% 5.0000%0.5000% 0.5000% 0.5000% 0.5000% 0.5000%

3.3000% 2.9900% 2.9900% 3.2700% 3.1000%5.0000% 5.0000% 5.0000% 5.0000% 5.0000%0.5000% 0.5000% 0.5000% 0.5000% 0.5000%

1.1000% 1.1900% 1.1900% 1.1800% 1.2000%5.0000% 5.0000% 5.0000% 5.0000% 5.0000%0.5000% 0.5000% 0.5000% 0.5000% 0.5000%

0.5000% 0.4900% 0.4900% 0.5200% 0.4000%5.0000% 5.0000% 5.0000% 5.0000% 5.0000%0.5000% 0.5000% 0.5000% 0.5000% 0.5000%

0.6000% 0.5600% 0.5600% 1.7100% 1.0000%5.0000% 5.0000% 5.0000% 5.0000% 5.0000%0.5000% 0.5000% 0.5000% 0.5000% 0.5000%

0.0000% 0.0000% 0.0000% 0.0000% 0.0000%3.1250% 3.1250% 3.1250% 3.1250% 3.1250%0.3125% 0.3125% 0.3125% 0.3125% 0.3125%

Valley Metro Regional Public Transportation Authority Transportation Excise Tax Revenue Bonds Bond Coverage Last Three Fiscal Years

71

FiscalYear Principal Interest Total

PledgedRevenue Coverage

2010 -$ 5,259,888$ 5,259,888$ 99,351,318$ 18.89 2011 2,265,000 5,245,318 7,510,318 102,688,559 13.67 2012 5,085,000 5,053,018 10,138,018 107,889,134 10.64

Note: On June 30, 2009, the Authority raised $100,075,000 on bonds issued secured by its portion of the Transportation

Excise Tax revenues collected by the Arizona Department of Revenue. Note: The pledged revenues of the Authority represent future sales taxes to be collected and used to repay the debt

outstanding.

Valley Metro Regional Public Transportation Authority Outstanding Debt by Type Last Three Fiscal Years

72

Fiscal Year Ended Transportation Excise Percentage ofJune 30 Tax Revenue Bonds Personal Income Per Capita

2010 100,075,000$ 0.07% 26.35$ 2011 100,075,000 0.06% 26.22 2012 97,810,000 0.06% 25.62

Business-type Activities

Source: The source of this information is the Authority’s financial records.

Valley Metro Regional Public Transportation Authority Transportation Excise Tax Revenue Bonds Debt Service Revenue and Cost Per Capita Last Three Fiscal Years

73

MaricopaFiscal Total County Cost RevenueYear Principal Interest Cost Revenue Population (1) Per Capita Per Capita

2010 -$ 5,259,888$ 5,259,888$ 99,351,318$ 4,115,811$ 1$ 24$ 2011 2,265,000 5,245,318 7,510,318 102,688,559 3,817,117 2 27 2012 5,085,000 5,053,018 10,138,018 107,889,134 3,817,117 3 28

(1) Source: Maricopa Association of Governments, Resident Population Estimates Documentation

74


Valley Metro Regional Public Transportation Authority Regional Population Statistics Last Ten Fiscal Years

75

FY 2001/02 (1) FY 2002/03 (1) FY 2003/04 (1) FY 2004/05 (1) FY 2005/06 (1)

Maricopa County 3,192,125 3,296,250 3,406,170 3,537,630 3,648,545Avondale 40,445 47,610 54,200 60,490 66,110Buckeye N/A N/A N/A N/A N/AChandler 186,875 194,390 209,140 221,555 231,785El Mirage 11,915 20,645 25,550 28,420 29,630Gilbert 122,360 133,640 151,975 165,325 178,000Glendale 224,970 227,495 231,150 234,225 236,030Goodyear (3) N/A N/A N/A N/A N/AMesa 414,075 427,550 435,380 448,845 452,355Peoria 117,200 122,655 126,815 132,805 137,285Phoenix 1,344,775 1,365,675 1,390,830 1,421,450 1,452,825Queen Creek (3) N/A N/A N/A N/A N/AScottsdale 209,960 214,090 218,095 221,980 223,835Surprise (3) 38,400 45,125 51,885 64,210 78,265Tempe 159,435 159,425 159,905 161,420 160,735 (1) Source: Maricopa Association of Governments, Resident Population Estimates Documentation (2) Source: U.S. Census (3) Data for fiscal years prior to membership of the Authority was not available. The Regional Public Transportation Authority (“Authority”) was established in 1985 to develop a regional transit plan and to develop and operate a regional transit system in Maricopa County, Arizona. The Authority is governed by a sixteen-member Board of Directors consisting of a member of the Maricopa County Board of Supervisors, and the mayors (or their designees) of the cities of Avondale, Chandler, El Mirage, Glendale, Goodyear, Mesa, Peoria, Phoenix, Scottsdale, Surprise, Tempe and Tolleson and the towns of Buckeye, Gilbert and Queen Creek. Any municipality in Maricopa County may join the Authority and have one elected official serve on the Board of Directors by committing a portion of its local transportation assistance funds to local public transportation. State legislation designates that 100% of the proceeds from the Arizona State Lottery received by participating municipalities with 300,000 or more in population, known as local transportation assistance funds, must be expended for public transportation in the respective municipalities to maintain a position on the Authority’s Board of Directors. For all other municipalities, the requirement is 33.3% for cities with a population between 60,000 and 300,000 and 75% for cities with less than 60,000 population. Local transportation assistance funds (“LTAF”) and minimum public transportation expenditures for participating municipalities for the last ten years are on the LTAF statistics table.

76

FY 2006/07 (1) FY 2007/08 (1) FY 2008/09 (1) FY 2009/10 (1) FY 2010/11 (1)

3,792,675 3,907,492 3,987,942 4,023,331 3,817,11772,210 75,256 76,648 76,900 76,238

N/A N/A 50,143 52,764 50,876235,450 241,205 244,376 245,087 236,123

32,605 33,583 33,647 33,610 31,797185,030 203,656 214,820 217,521 208,453243,540 246,076 248,435 249,197 226,721

49,720 55,954 59,436 61,916 65,275451,360 456,344 459,682 461,102 439,041145,135 151,541 155,557 158,709 154,065

1,505,265 1,538,568 1,561,485 1,575,423 1,445,63218,690 21,363 23,329 24,926 26,361

237,120 240,126 242,337 243,501 217,38598,140 104,895 108,761 109,482 117,517

165,890 167,871 172,641 174,833 161,719

Valley Metro Regional Public Transportation Authority Top Ten Employers for Maricopa County Previous Year and Ten Years Ago

77

Employer Employees Rank % of Total Employees Rank % of Total

State of Arizona 24,200 1 1.50% 59,348 1 3.82%Banner Health Systems 23,100 2 1.43% 13,973 4 0.90%Wal-Mart Stores, Inc. 15,000 3 0.93% 13,800 6 0.89%City of Phoenix 13,500 4 0.84% 12,917 7 0.83%Maricopa County 13,500 5 0.84% 13,860 5 0.89%Frys Food Stores 12,600 6 0.78% 9,837 8 0.63%Bank of America 12,000 7 0.74%Wells Fargo & Company 10,100 8 0.63%Intel Corporation 10,100 9 0.63%Honeywell 8,800 10 0.54% 17,500 2 1.13%Motorola 15,500 3 1.00%US Postal Service - Arizona District 9,756 9 0.63%Raytheon Missile Systems 9,700 10 0.62%

Total for Principal Employers 142,900 8.85% 176,191 11.34%

Total Employment in Maricopa Cty 1,615,100 1,552,400

2011 2002

Source: Maricopa County Association of Governments, Employer Database (2011) Arizona Department of Administration, Current Employment Statistics (CES) Phoenix Business Journal Book of Lists

Note: The information for FY 2012 was not available at the time the CAFR was drafted.

78


Valley Metro Regional Public Transportation Authority Local Transportation Assistance Funds Last Ten Fiscal Years

79

FY 2001/2002 FY 2002/2003 FY 2003/2004 FY 2004/2005 FY 2005/2006

AvondaleLocal transportation assistance funds received 203,685 220,818 252,589 277,421 299,299 Minimum local expenditures required 152,764 165,614 189,442 208,066 99,667 Percentage required 75.0% 75.0% 75.0% 75.0% 33.3%

Buckeye (1) Local transportation assistance funds received N/A N/A N/A N/A N/AMinimum local expenditures required N/A N/A N/A N/A N/APercentage required N/A N/A N/A N/A N/A

ChandlerLocal transportation assistance funds received 1,002,340 1,020,285 1,031,314 1,072,387 1,096,287 Minimum local expenditures required 334,113 340,095 343,771 357,462 365,064 Percentage required 33.3% 33.3% 33.3% 33.3% 33.3%

El MirageLocal transportation assistance funds received 43,192 65,053 109,530 130,312 140,622 Minimum local expenditures required 32,394 48,790 82,148 97,734 105,467 Percentage required 75.0% 75.0% 75.0% 75.0% 75.0%

GilbertLocal transportation assistance funds received 622,681 668,051 709,012 778,323 818,025 Minimum local expenditures required 207,560 222,684 236,337 259,441 272,402 Percentage required 33.3% 33.3% 33.3% 33.3% 33.3%

GlendaleLocal transportation assistance funds received 1,242,059 1,228,273 1,206,948 1,186,391 1,158,998 Minimum local expenditures required 414,020 409,424 402,316 395,464 385,946 Percentage required 33.3% 33.3% 33.3% 33.3% 33.3%

Goodyear (1) Local transportation assistance funds received NA NA NA NA NAMinimum local expenditures required NA NA NA NA NAPercentage required NA NA NA NA NA

MesaLocal transportation assistance funds received 2,249,873 2,260,734 2,268,317 2,233,853 2,220,987 Minimum local expenditures required 2,249,873 2,260,734 2,268,317 2,233,853 2,220,987 Percentage required 100.0% 100.0% 100.0% 100.0% 100.0%

PeoriaLocal transportation assistance funds received 616,116 639,879 650,732 650,326 657,162 Minimum local expenditures required 205,372 213,293 216,911 216,775 218,835 Percentage required 33.3% 33.3% 33.3% 33.3% 33.3%

PhoenixLocal transportation assistance funds received 7,498,747 7,342,097 7,245,430 7,138,976 7,033,839 Minimum local expenditures required 7,498,747 7,342,097 7,245,430 7,138,976 7,033,839 Percentage required 100.0% 100.0% 100.0% 100.0% 100.0%

Queen Creek (1) Local transportation assistance funds received NA NA NA NA NAMinimum local expenditures required NA NA NA NA NAPercentage required NA NA NA NA NA

ScottsdaleLocal transportation assistance funds received 1,150,630 1,146,323 1,135,830 1,119,229 1,098,399 Minimum local expenditures required 383,543 382,108 378,610 373,076 365,767 Percentage required 33.3% 33.3% 33.3% 33.3% 33.3%

Surprise (1) (2) Local transportation assistance funds received N/A N/A 239,405 265,383 317,703 Minimum local expenditures required N/A N/A 179,554 88,373 105,795 Percentage required N/A N/A 75.0% 33.3% 33.3%

TempeLocal transportation assistance funds received 800,415 870,471 845,811 821,152 798,826 Minimum local expenditures required 266,805 290,157 281,937 273,717 266,009 Percentage required 33.3% 33.3% 33.3% 33.3% 33.3%

TollesonLocal transportation assistance funds received N/A N/A N/A N/A N/AMinimum local expenditures required N/A N/A N/A N/A N/APercentage required N/A N/A N/A N/A N/A

Source: State of Arizona, Office of the Treasurer

(1) Data for fiscal years prior to membership of the Authority was not available.

(2) Percentages of proceeds designated for expenditures have been revised according to the reported population starting FY2004/05. The Regional Public Transportation Authority (“Authority”) was established in 1985 to develop a regional transit plan and to develop and operate a regional transit system in Maricopa County, Arizona. The Authority is governed by a sixteen-member Board of Directors consisting of a member of the Maricopa County Board of Supervisors, and the mayors (or their designees) of the cities of Avondale, Chandler, El Mirage, Glendale, Goodyear, Mesa, Peoria, Phoenix, Scottsdale, Surprise, Tempe and Tolleson and the towns of Buckeye, Gilbert and Queen Creek. Any municipality in Maricopa County may join the Authority and have one elected official serve on the Board of Directors by committing a portion of its local transportation assistance funds to local public transportation. State legislation designates that 100% of the proceeds received by participating municipalities with 300,000 or more in population from the Arizona State Lottery, known as local transportation assistance funds, must be expended for public transportation in the respective municipalities to maintain a position on the Authority’s Board of Directors. For all other municipalities, the requirement is 33.3% for cities with a population between 60,000 and 300,000 and 75% for cities with less than 60,000 population. Local transportation assistance funds (“LTAF”) and minimum public transportation expenditures for participating municipalities for the last ten years are shown above.

(3) LTAF Program was eliminated in March 2010.

80

FY 2006/2007 FY 2007/2008 FY 2008/2009 FY 2009/2010 FY 2010/2011 (3)

317,127 331,478 318,231 185,086 - 105,603 110,382 105,971 61,634 -

33.3% 33.3% 33.3% 33.3% 0.0%

N/A N/A 171,121 121,083 - N/A N/A 128,341 90,812 - N/A N/A 75.0% 75.0% 0.0%

1,111,863 1,080,826 1,019,970 590,108 - 370,250 359,915 339,650 196,506 -

33.3% 33.3% 33.3% 33.3% 0.0%

142,134 149,672 142,011 81,249 - 106,600 112,254 106,508 60,937 -

75.0% 75.0% 75.0% 75.0% 0.0%

853,858 849,374 861,189 518,737 - 284,335 282,842 286,776 172,739 -

33.3% 33.3% 33.3% 33.3% 0.0%

1,132,226 1,117,962 1,040,568 599,909 - 377,031 372,281 346,509 199,770 -

33.3% 33.3% 33.3% 33.3% 0.0%

197,755 228,238 236,610 143,523 - 148,316 171,179 177,458 107,642 -

75.0% 75.0% 75.0% 75.0% 0.0%

2,169,928 2,071,953 1,929,717 1,110,018 - 2,169,928 2,071,953 1,929,717 1,110,018 -

100.0% 100.0% 100.0% 100.0% 0.0%

658,598 666,237 640,826 375,639 - 219,313 221,857 213,395 125,088 -

33.3% 33.3% 33.3% 33.3% 0.0%

6,969,140 6,909,870 6,506,059 3,770,600 - 6,969,140 6,909,870 6,506,059 3,770,600 -

100.0% 100.0% 100.0% 100.0% 0.0%

76,224 85,796 91,884 57,536 - 57,168 64,347 68,913 43,152 - 75.0% 75.0% 75.0% 75.0% 0.0%

1,073,727 1,088,492 1,015,408 585,184 - 357,551 362,468 338,131 194,866 -

33.3% 33.3% 33.3% 33.3% 0.0%

375,434 450,508 443,564 262,631 - 125,019 150,019 147,707 87,456 -

33.3% 33.3% 33.3% 33.3% 0.0%

771,039 761,513 709,867 416,885 - 256,756 253,584 236,386 138,823 -

33.3% 33.3% 33.3% 33.3% 0.0%

N/A N/A N/A 16,500 - N/A N/A N/A 12,375 - N/A N/A N/A 75.0% 0.0%

Valley Metro Regional Public Transportation Authority Demographic and Economic Statistics Last Ten Fiscal Years

81

(1) Calendar year (2) Source: Arizona Workforce Informer, Labor Market Information, for Maricopa County

Population for fiscal years 2005 through 2010 are estimates from the Department of Economic Security. Personal income for fiscal years 2008 through 2010 were not available. The income amounts provided are estimates based on a 2.91% growth rate.

(3) For years through 2000, median age is based on the 1990 U.S. Census. For 2001 through 2008, median age is

based on the 2000 U.S. Census. For 2009 and 2010, median age is from Maricopa Association of Governments Human Services Coordination Transportation Plan, 2009 Update.

(4) Source: Arizona Department of Education, Research and Evaluation Section. School enrollment is based on the

census at the start of the school year. (5) Maricopa County Labor Force and NonFarm Employment.

Fiscal Income (1,2) Per Capita Median School UnemploymentYear Population (1,2) (in thousands) Income (1,2) Age (1,3) Enrollment (4) Rate (5)

2011 3,817,117 135,393,497$ 27,185$ 34.8 684,028 8.3%2010 4,115,811 152,216,281 36,983 36.8 684,510 8.8%2009 3,987,942 147,912,041 37,090 33.6 683,966 8.1%2008 3,907,492 143,729,512 36,783 33.7 732,146 4.2%2007 3,792,675 139,665,253 36,825 33.4 707,771 3.5%2006 3,648,545 134,339,487 36,820 33.0 689,411 3.6%2005 3,537,630 120,716,738 34,124 33.0 652,333 4.1%2004 3,498,587 110,278,789 31,521 33.0 626,461 4.4%2003 3,388,711 101,378,940 29,917 33.0 600,577 5.2%2002 3,293,441 96,998,974 29,452 33.0 565,517 5.6%

Valley Metro Regional Public Transportation Authority Full-time Equivalent Employees (FTE) by Function/Program Last Ten Fiscal Years

82

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Function/ProgramGovernmental activities:

Regional planning 4.5 4.6 4.5 7.9 7.9 8.1 8.0 8.1 7.7 7.9Transportation demand management 10.3 10.3 10.3 10.3 9.0 10.5 10.0 10.0 9.0 8.5Regional customer services - 4.7 4.7 4.2 71.5 74.6 78.2 78.3 72.9 73.3Administration 7.9 7.9 8.9 14.8 20.1 22.2 22.2 22.2 20.4 19.5

Total governmental activities FTE 22.6 27.5 28.4 37.1 108.5 115.4 118.5 118.6 110.0 109.1

Business-type activities: Transit service operations 6.4 4.5 4.6 4.9 10.5 8.6 8.5 8.4 10.1 10.4Light rail transit (1) 31.0 33.0 42.0 47.0 51.0 58.0 92.0 96.0 84.0 88.5

Total business-type activities FTE 37.4 37.5 46.6 51.9 61.5 66.6 100.5 104.4 94.1 98.9

Total primary government FTE 60.0 65.0 75.0 89.0 170.0 182.0 219.0 223.0 204.0 208.0

Source: Adopted Valley Metro Operating Budgets for the applicable years. (1) Light rail transit staff report to the Valley Metro Rail, Inc. Board of Directors.

Valley Metro Regional Public Transportation Authority Operating Indicators by Program – Fixed Route System Last Ten Fiscal Years

83

Source: Reports prepared by the Regional Public Transportation Authority (RPTA): Performance Management Analysis System for fiscal years 2001 through 2007. Annual Transit Performance Report for fiscal years beginning FY 2008. (1) Fixed route systems are comprised of various operators and contractors of service in Maricopa County; as the

regional authority, the Regional Public Transportation Authority in its role compiles and reports on system efficiency and effectiveness performance indicators.

(2) The Regional Public Transportation Authority statistics include the City of Mesa fixed route system and the City

of Scottsdale fixed route system that were separately managed through fiscal year 2004 and fiscal year 2001, respectively.

(3) Shuttle/Circulator System statistics were included in the Fixed Route System statistics through fiscal year 2000.

See Operating Indicators by Program - Shuttle / Circulator System. (4) NA - City of Glendale did not run a fixed route. Note: Information for fiscal year 2011-12 was not available at the time the CAFR was drafted.

FY 2001/2002 FY 2002/2003 FY 2003/2004 FY 2004/2005 FY 2005/2006Fixed Route System (1)

City of Phoenix Transit SystemTotal boardings 34,642,732 37,543,692 40,427,904 42,909,890 44,182,683 Revenue miles 14,498,806 16,479,011 16,956,333 17,420,722 17,166,702 Revenue hours 941,752 1,089,891 1,115,462 1,146,819 1,166,967 Operating cost 76,314,996$ 90,376,532$ 93,661,178$ 89,543,836$ 93,058,555$ Operating cost per boarding 2.20$ 2.41$ 2.32$ 2.09$ 2.11$ Farebox recovery ratio 25.5% 23.0% 24.8% 27.0% 26.6%

Regional Public Transportation Authority (2)Total boardings 4,979,305 5,688,992 6,503,504 6,203,696 6,484,886 Revenue miles 4,727,196 4,799,475 4,971,133 4,379,307 4,956,352 Revenue hours 321,379 379,892 375,171 276,517 389,349 Operating cost 17,271,336$ 17,059,807$ 18,200,836$ 16,445,778$ 19,613,325$ Operating cost per boarding 3.47$ 3.00$ 2.80$ 2.65$ 3.02$ Farebox recovery ratio 16.3% 19.7% 18.3% 23.1% 20.7%

City of TempeTotal boardings 3,865,511 4,906,953 4,813,237 4,805,598 5,063,284 Revenue miles 3,730,509 3,814,559 3,826,195 3,797,053 3,868,790 Revenue hours 350,657 267,347 314,932 311,852 297,027 Operating cost 12,485,395$ 13,110,640$ 14,864,954$ 15,738,112$ 16,738,459$ Operating cost per boarding 3.23$ 2.67$ 3.09$ 3.27$ 3.31$ Farebox recovery ratio 17.2% 20.6% 18.2% 17.3% 17.9%

City of Glendale - Luke LinkTotal boardings 36,404 51,246 70,823 93,024 101,444 Revenue miles 89,650 106,326 131,400 139,789 142,109 Revenue hours 3,876 4,630 7,088 7,962 8,121 Operating cost 136,565$ 163,768$ 228,160$ 218,243$ 232,802$ Operating cost per boarding 3.75$ 3.20$ 3.22$ 2.35$ 2.29$ Farebox recovery ratio 22.3% 30.5% 20.9% 26.8% 27.5%

Total f ixed route systemTotal boardings 43,523,952 48,190,883 51,815,468 54,012,208 55,832,297 Revenue miles 23,046,161 25,199,371 25,885,061 25,736,871 26,133,953 Revenue hours 1,617,664 1,741,760 1,812,653 1,743,150 1,861,464 Operating cost 106,208,292$ 120,710,747$ 126,955,128$ 121,945,969$ 129,643,141$ Operating cost per boarding 2.44$ 2.50$ 2.45$ 2.26$ 2.32$ Farebox recovery ratio 23.0% 22.3% 23.1% 25.2% 24.6%

84

FY 2006/2007 FY 2007/2008 FY 2008/2009 FY 2009/2010 FY 2010/2011

44,101,320 42,670,621 44,642,019 35,806,019 37,437,652 18,412,020 18,826,324 18,238,826 17,692,736 16,915,379 1,166,986 998,142 1,172,816 1,196,437 1,125,763

108,350,712$ 117,350,016$ 109,867,153$ 113,744,493$ 130,360,068$ 2.46$ 2.75$ 2.46$ 3.18$ 3.48$

27.0% 27.5% 32.1% 30.9% 25.7%

6,772,065 7,908,819 8,390,453 7,277,608 8,054,520 5,521,319 6,218,876 6,548,640 6,392,468 5,902,973

381,620 377,267 372,580 438,051 355,964 22,493,215$ 30,076,788$ 34,853,186$ 33,248,059$ 34,380,383$

3.32$ 3.80$ 4.15$ 4.57$ 4.27$ 20.2% 18.1% 15.5% 20.4% 20.9%

6,808,547 4,896,103 5,846,385 5,217,425 8,313,058 4,497,200 4,372,291 4,752,561 4,889,470 5,678,666

364,249 326,640 371,445 370,738 498,944 19,496,217$ 19,947,661$ 27,191,179$ 28,676,837$ 24,851,193$

2.86$ 4.07$ 4.65$ 5.50$ 2.99$ 16.2% 16.6% 11.8% 17.2% 19.3%

227,702 NA NA 116,952 110,913 252,413 NA NA 101,154 99,773 19,455 NA NA 37,006 8,713

435,099$ NA NA 820,392$ 786,101$ 1.91$ NA NA 7.01$ 7.09$

227.5% NA NA 3.1% 3.1%

57,909,634 55,475,543 58,878,857 48,418,004 53,916,143 28,682,952 29,417,491 29,540,027 29,075,828 28,596,791 1,932,310 1,702,049 1,916,841 2,042,232 1,989,384

150,775,243$ 167,374,465$ 171,911,518$ 176,489,781$ 190,377,745$ 2.60$ 3.02$ 2.92$ 3.65$ 3.53$

224.6% 24.5% 25.5% 26.6% 23.9%

Valley Metro Regional Public Transportation Authority Operating Indicators by Program – Dial-a-Ride System Last Ten Fiscal Years

85

FY 2001/2002 FY 2002/2003 FY 2003/2004 FY 2004/2005 FY 2005/2006

Dial-a-Ride System (1)Phoenix Dial-a-Ride

Total boardings 270,493 333,860 369,791 393,053 415,733 Revenue miles 3,238,681 3,687,477 3,901,614 4,084,991 4,276,365 Revenue hours 230,951 255,922 262,372 274,099 285,137 Operating cost 9,462,730$ 10,385,900$ 11,150,114$ 12,375,324$ 12,452,214$ Operating cost per boarding 34.98$ 31.11$ 30.15$ 31.49$ 29.95$ Farebox recovery ratio 5.2% 4.9% 4.8% 4.0% 5.0%

Phoenix Reserve-a-RideTotal boardings 193,986 162,760 153,697 152,631 NRRevenue miles 550,850 540,282 540,388 518,616 NRRevenue hours 51,559 47,155 50,754 47,282 NROperating cost 2,589,906$ 2,689,066$ 2,757,131$ 2,853,105$ NROperating cost per boarding 13.35$ 16.52$ 17.94$ 18.69$ NRFarebox recovery ratio 3.3% 3.2% 3.1% 2.7% NR

East Valley Dial-a-RideTotal boardings 252,441 240,879 222,736 223,130 220,153 Revenue miles 1,995,550 1,371,852 2,048,542 1,622,795 1,796,728 Revenue hours 116,884 117,217 111,514 118,032 121,607 Operating cost 4,772,217$ 5,076,798$ 4,963,617$ 5,338,924$ 6,596,249$ Operating cost per boarding 18.90$ 21.08$ 22.28$ 23.93$ 29.96$ Farebox recovery ratio 7.6% 7.0% 6.5% 6.6% 5.2%

Maricopa County STSTotal boardings 124,822 106,395 103,533 105,342 100,243 Revenue miles 455,897 732,376 730,180 523,119 913,009 Revenue hours 56,251 70,238 67,836 41,189 56,585 Operating cost 1,379,719$ 1,587,982$ 1,534,951$ 3,249,859$ 3,312,076$ Operating cost per boarding 11.05$ 14.93$ 14.83$ 30.85$ 33.04$ Farebox recovery ratio 4.5% 1.1% 1.0% 0.4% 0.3%

Sun Cities Area TransitTotal boardings 60,400 60,345 61,147 58,069 57,091 Revenue miles 218,313 226,194 229,917 254,897 230,472 Revenue hours 17,998 19,226 20,015 22,648 21,802 Operating cost 656,655$ 671,365$ 671,410$ 714,915$ 689,473$ Operating cost per boarding 10.87$ 11.13$ 10.98$ 12.31$ 12.08$ Farebox recovery ratio 22.9% 22.4% 22.7% 21.3% 23.5%

Source: Reports prepared by the Regional Public Transportation Authority: Performance Management Analysis System for fiscal years 2001 through 2007. Annual Transit Performance Report for fiscal years beginning FY 2008. (1) Dial-a-ride systems are comprised of various operators and contractors of service in Maricopa County; as the


NR Not reported Note: Information for fiscal year 2011-12 was not available at the time the CAFR was drafted.

86

FY 2006/2007 FY 2007/2008 FY 2008/2009 FY 2009/2010 FY 2010/2011

410,838 391,420 396,474 353,674 328,502 NA 4,806,031 4,064,584 3,675,478 3,464,880

287,882 292,601 295,057 283,686 257,874 13,655,624$ 14,759,075$ 14,991,465$ 14,749,818$ 15,519,920$

33.24$ 37.71$ 37.81$ 41.70$ 47.24$ 4.7% 4.1% 4.2% 7.3% 6.3%

NR NR NR NR NRNR NR NR NR NRNR NR NR NR NRNR NR NR NR NRNR NR NR NR NRNR NR NR NR NR

226,050 240,424 262,364 248,462 234,095 NA NA 2,090,445 2,123,274 2,191,197

126,131 131,842 137,604 129,168 128,335 7,685,324$ 8,461,088$ 9,760,107$ 9,322,558$ 9,096,936$

34.00$ 35.19$ 37.20$ 37.52$ 38.86$ 5.0% 4.6% 4.1% 4.9% 7.8%

91,082 87,134 35,488 NR NRNA NA 362,525 NR NR

49,524 47,511 24,641 NR NR3,368,464$ 3,350,837$ 256,574$ NR NR

36.98$ 38.46$ 7.23$ NR NR0.0% 0.0% 0.0% NR NR

45,612 34,924 27,652 30,509 14,715 NA NA 109,741 120,305 53,614

16,526 12,974 13,081 30,509 5,367 697,877$ 560,024$ 610,581$ 558,965$ 228,146$

15.30$ 16.04$ 22.08$ 18.32$ 15.50$ 18.0% 22.0% 17.4% 18.6% 24.9%

Valley Metro Regional Public Transportation Authority Operating Indicators by Program – Dial-a-Ride System (Continued) Last Ten Fiscal Years

87

FY 2001/2002 FY 2002/2003 FY 2003/2004 FY 2004/2005 FY 2005/2006

Dial-a-Ride System (1)Glendale Dial-a-Ride

Total boardings 76,622 81,768 86,132 87,831 89,055 Revenue miles 316,961 376,504 387,531 386,587 390,561 Revenue hours 22,662 25,782 26,252 29,554 29,594 Operating cost 1,807,835$ 2,074,611$ 2,255,038$ 2,247,156$ 2,387,554$ Operating cost per boarding 23.59$ 25.37$ 26.18$ 25.58$ 26.81$ Farebox recovery ratio 4.9% 4.7% 4.7% 5.0% 4.6%

Peoria Dial-a-RideTotal boardings 32,176 30,399 29,258 33,805 42,560 Revenue miles 196,224 189,984 158,456 153,805 159,903 Revenue hours 9,457 9,276 7,920 8,258 9,975 Operating cost 624,322$ 727,770$ 738,683$ 827,786$ 927,312$ Operating cost per boarding 19.40$ 23.94$ 25.25$ 24.49$ 21.79$ Farebox recovery ratio 5.4% 5.0% 4.5% 4.0% 5.1%

El Mirage Dial-a-RideTotal boardings 1,204 1,103 1,061 1,558 1,466 Revenue miles 6,020 9,172 7,230 10,017 12,284 Revenue hours 750 1,834 NR NR 1,613 Operating cost 93,178$ 93,632$ 76,813$ 70,459$ 74,023$ Operating cost per boarding 77.39$ 84.89$ 72.40$ 45.22$ 50.49$ Farebox recovery ratio 1.5% 0.9% 1.0% 1.7% 2.0%

Surprise Dial-a-RideTotal boardings 7,775 7,094 7,387 8,181 12,578 Revenue miles 45,800 43,716 48,768 68,291 86,045 Revenue hours 2,818 3,881 4,891 5,016 6,554 Operating cost 105,800$ 162,931$ 185,646$ 283,624$ 367,093$ Operating cost per boarding 13.61$ 22.97$ 25.13$ 34.67$ 29.19$ Farebox recovery ratio 6.2% 4.6% 4.3% 3.5% 3.5%

Total Dial-a-Ride SystemTotal boardings 1,019,919 1,024,603 1,034,742 1,063,600 938,879 Revenue miles 7,024,296 7,177,557 8,052,626 7,623,118 7,865,367 Revenue hours 509,330 550,531 551,554 546,078 532,867 Operating cost 21,492,362$ 23,470,055$ 24,333,403$ 27,961,152$ 26,805,994$ Operating cost per boarding 21.07$ 22.91$ 23.52$ 26.29$ 28.55$ Farebox recovery ratio 6.0% 5.4% 5.2% 4.5% 4.9%

Source: Reports prepared by the Regional Public Transportation Authority: Performance Management Analysis System for fiscal years 2001 through 2007. Annual Transit Performance Report for fiscal years beginning FY 2008. (1) Dial-a-ride systems are comprised of various operators and contractors of service in Maricopa County; as the


NR Not reported Note: Information for fiscal year 2011-12 was not available at the time the CAFR was drafted.

88

FY 2006/2007 FY 2007/2008 FY 2008/2009 FY 2009/2010 FY 2010/2011

84,132 88,638 92,381 89,808 97,741 NA NA 408,986 411,136 406,413

29,448 30,642 30,594 29,927 30,347 2,446,602$ 2,878,740$ 2,431,098$ 2,430,543$ 2,604,743$

29.08$ 32.48$ 26.32$ 27.06$ 26.65$ 3.3% 3.8% 4.4% 4.3% 4.0%

45,790 40,122 38,978 32,921 29,317 NA NA 212,812 158,846 122,789

12,663 14,875 14,567 13,218 8,156 1,045,445$ 1,239,982$ 1,239,982$ 1,109,380$ 1,006,618$

22.83$ 30.91$ 31.81$ 33.70$ 34.34$ 4.5% 3.2% 3.1% 2.9% 3.1%

1,947 1,131 1,459 NR NRNA NA NA NR NR

1,820 1,764 1,680 NR NR99,256$ 97,262$ 102,139$ NR NR50.98$ 86.00$ 70.01$ NR NR3.7% 2.3% 2.9% NR NR

17,339 20,075 19,336 22,151 23,942 NA NA 79,989 83,761 81,859

8,037 8,698 7,918 8,561 8,601 506,921$ 589,469$ 644,740$ 591,150$ 617,751$

29.24$ 29.36$ 33.34$ 26.69$ 25.80$ 3.6% 3.7% 3.0% 3.8% 4.1%

920,843 902,737 872,673 777,525 728,312 NA 4,806,031 7,329,082 6,572,800 6,320,752

532,031 540,907 525,142 495,069 438,680 29,505,513$ 31,936,477$ 30,036,686$ 28,762,414$ 29,074,114$

32.04$ 35.38$ 34.42$ 36.99$ 39.92$ 4.4% 4.1% 4.3% 6.2% 6.8%

Valley Metro Regional Public Transportation Authority Operating Indicators by Program – Shuttle / Circulator System Last Ten Fiscal Years

89

FY 2001/2002 FY 2002/2003 FY 2003/2004 FY 2004/2005 FY 2005/2006Shuttle/Circulator System

City of Phoenix (1) Total boardings 437,421 770,348 747,351 794,945 766,676 Revenue miles 361,830 604,325 577,579 601,547 580,884 Revenue hours 26,505 40,480 37,636 38,156 36,923 Operating cost 1,058,452$ 1,619,238$ 1,435,044$ 2,386,820$ 1,812,780$ Operating cost per boarding 2.42$ 2.10$ 1.92$ 3.00$ 2.36$ Farebox recovery ratio 0.0% 0.0% 0.0% 0.0% 0.0%

City of Tempe (2) Total boardings 1,222,122 1,445,714 1,705,025 1,999,795 2,034,656 Revenue miles 601,509 441,587 487,780 475,609 479,595 Revenue hours 61,681 30,949 40,149 39,831 48,794 Operating cost 1,995,345$ 1,517,734$ 1,771,216$ 1,835,387$ 1,954,659$ Operating cost per boarding 1.63$ 1.05$ 1.04$ 0.92$ 0.96$ Farebox recovery ratio 0.0% 0.0% 0.0% 0.0% 0.0%

City of ScottsdaleTotal boardings 42,456 49,498 52,599 92,139 125,435 Revenue miles 30,060 33,129 37,272 57,696 80,489 Revenue hours 4,676 4,683 6,185 8,167 14,025 Operating cost 290,066$ 308,684$ 377,726$ 547,764$ 953,477$ Operating cost per boarding 6.83$ 6.24$ 7.18$ 5.94$ 7.60$ Farebox recovery ratio 0.0% 0.0% 0.0% 0.0% 0.0%

City of Glendale (5) Total boardings 51,180 54,093 59,692 82,569 96,258 Revenue miles 66,784 78,895 93,794 100,295 96,838 Revenue hours 8,055 6,361 7,897 8,301 7,969 Operating cost 267,801$ 185,407$ 203,149$ 144,934$ 158,442$ Operating cost per boarding 5.23$ 3.43$ 3.39$ 1.76$ 1.65$ Farebox recovery ratio 4.6% 5.7% 5.9% 11.0% 10.3%

Regional Public Transportation Authority (6) Total boardings N/A N/A N/A N/A N/ARevenue miles N/A N/A N/A N/A N/ARevenue hours N/A N/A N/A N/A N/AOperating cost N/A N/A N/A N/A N/AOperating cost per boarding N/A N/A N/A N/A N/AFarebox recovery ratio N/A N/A N/A N/A N/A

Total Shuttle/Circulator SystemTotal boardings 1,753,179 2,319,653 2,564,667 2,969,448 3,023,025 Revenue miles 1,060,183 1,157,936 1,196,425 1,235,147 1,237,806 Revenue hours 100,917 82,473 91,867 94,455 107,711 Operating cost 3,611,664$ 3,631,063$ 3,787,135$ 4,914,905$ 4,879,358$ Operating cost per boarding 2.06$ 1.57$ 1.48$ 1.66$ 1.61$ Farebox recovery ratio N/A N/A N/A N/A N/A

Source: Reports prepared by the Regional Public Transportation Authority: Performance Management Analysis System for fiscal years 2001 through 2007. Annual Transit Performance Report for fiscal years beginning FY 2008.

(1) City of Phoenix - Alex, Dash, Mary & Smart; prior to FY 07-08 included only Dash and Alex. (2) City of Tempe - FLASH, Orbit-Earth, Jupiter, Mars, Mercury & Venus; prior to FY 07-08 included only FLASH, Neighborhood

FLASH. (3) City of Scottsdale - Neighborhood Trolley, Miller Road Trolley, and Downtown Trolley; prior to FY 07-08 included only

Roundup. (4) City of Scottsdale did not track revenue miles for FY 07-08. (5) City of Glendale - GUS (6) RPTA- Mesa BUZZ

Note: Information for fiscal year 2011-12 was not available at the time the CAFR was drafted.

90

FY 2006/2007 FY 2007/2008 FY 2008/2009 FY 2009/2010 FY 2010/2011

735,941 1,799,974 2,599,292 2,643,678 1,410,810 580,080 1,614,317 1,960,474 1,609,412 624,617 36,710 79,529 118,173 99,367 37,488

1,889,393$ 7,173,722$ 9,626,975$ 7,306,773$ 4,062,374$ 2.57$ 3.99$ 3.70$ 2.76$ 2.88$ 0.0% 0.1% 0.0% 0.0% 0.0%

1,616,729 2,456,646 3,307,223 3,660,543 3,143,824 482,538 1,613,904 2,105,878 1,819,126 1,489,463 52,379 150,171 206,964 194,057 169,543

2,091,895$ 6,833,012$ 11,414,395$ 10,070,159$ 9,191,363$ 1.29$ 2.78$ 3.45$ 2.75$ 2.92$ 0.0% 0.0% 0.0% 0.0% 0.0%

274,961 384,000 572,925 652,230 897,858 219,861 - 439,307 358,482 619,658 33,828 48,240 48,648 37,006 N/A

1,887,546$ 2,400,000$ 2,627,403$ N/A 2,570,545$ 6.86$ 6.25$ 4.59$ N/A 2.86$ 0.0% 0.0% 0.0% N/A N/A

97,681 110,941 113,382 116,952 110,915 NR 110,005 98,760 104,154 99,773 NR 8,858 8,735 12,412 8,713 NR 176,574$ 668,581$ 820,392$ 786,101$ NR 1.59$ 5.90$ 7.01$ 7.09$ NR 16.3% 3.6% 3.1% 3.1%

N/A N/A 80,133 200,504 211,887 N/A N/A 60,795 105,935 104,540 N/A N/A 5,755 8,726 8,044 N/A N/A 319,570$ 547,823$ 618,061$ N/A N/A 3.99$ 2.73$ 2.92$ N/A N/A 0.0% 0.0% 0.0%

2,725,312 4,751,561 6,672,955 7,273,907 5,775,294 1,282,479 3,338,226 4,665,214 3,997,109 2,938,051

122,917 286,798 388,275 351,568 223,788 5,868,834$ 16,583,308$ 23,988,343$ 18,745,147$ 17,228,444$

2.15$ 3.49$ 3.59$ 2.58$ 2.98$ N/A 0.2% 0.1% N/A 0.1%

Valley Metro Regional Public Transportation Authority Capital Asset Statistics by Function/Program Revenue Vehicles for Transit Service Operations Last Ten Fiscal Years

91

Fiscal Local and Paratransit /Year Express Bus Dail-a-Ride Vanpool

2002/03 80 67 NA2003/04 80 62 NA2004/05 133 61 2502005/06 181 57 3032006/07 172 75 3082007/08 192 76 3472008/09 257 76 4212009/10 251 111 3762010/11 242 80 3762011/12 205 58 400

Source: National Transit Data Base (NTD) (1999/00-2007/08) FAS GOV 100 Asset Accounting (2008/09-current) (1) For years FY98 through FY04, the NTD reported numbers included vans that were owned by the contractor; thus,

those assets are not reported.

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